9911796707
TMI Blog2002 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... - for the months of 4/2000 to 6/2000 on the inputs Cefotaxime Sodium Sterile purchased from a 100% EOU viz. M/s. Orchid Chemicals & Pharmaceuticals Limited; that the assessee had availed the inadmissible Cenvat credit of Central Excise duties paid on excisable goods manufactured by 100% EOU and allowed to be sold in India under the provisions of Section 3 of CEA, 1944 r/w relevant exemption notification. The Cenvat credit was availed to the extent of Basic Customs duty/auxiliary duty and S.A.D. paid on inputs received vide Invoice Nos. 1211/22-3-2000 and 399/10-7-2000 amounting to Rs. 2,19,220/-. The input manufacturer appeared to have paid the Central Excise duty at effective rate on clearance made in the Domestic Tariff Area equal to aggregate of duties of customs under proviso to Section 3 of CEA, 1944 r/w relevant exemption Notification No. 2/94, dated 1-1-1995 as amended, which included Basic Customs duty/Auxiliary duty/Additional Customs duty and SAD. The Cenvat credit was allowed/restricted to the equivalent of additional duty only, which was leviable under Section 3 of Customs Tariff Act, 1975. He, therefore, issued a SCN dated 27-2-2002 asking the assessee to explain as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Importance) Act, 1957, the Modvat credit would not be available in respect of such duty. The Hon'ble Tribunal have allowed the assessee's appeal in a similar matter vide their Order Nos. C-II/501-502/WZB/2001, dated 8-3-2001 and set aside the OIA No. YPP/130/M.III/2000, dated 30-6-2000 passed by the Commissioner (Appeals). The Hon'ble CEGAT while allowing the appeal of the assessee in Appeal No. E/2062/2000 vide Order No. C-II/220/WZB/2001, dated 5-1-2001 on the similar issue have observed that the question has been decided by the Larger Bench in the case of M/s. Vikram Ispat, 2000 (120) E.L.T. 800 (T-LB) supra. Therefore, the question of quantum of Modvat which was admissible stood settled as of now by virtue of above referred reasoned order of the CEGAT. The assessee had taken the Modvat credit of Additional Duty of Customs leviable on like goods under Section 3 of Customs Tariff Act, 1975 paid on such inputs, which was in conformity with Notification No. 21/99-C.E. (N.T.), dated 26-2-1999 issued in supersession of the Notification No. 5/94-C.E. (N.T.), dated 1-3-1994. The Additional Customs Duty leviable @ 10% adv. came to Rs. 2,07,060/- in case of Invoice No. 1211/22-3-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms duty under Section 3 of the Customs Tariff Act, 1975, the effective chargeable basic duty/Auxiliary duty was to be added to the value of the goods imported in terms of Section 14 of the Customs Act, 1962. 8. He, therefore, directed the A.C.C.Ex., Vasai Division, Mumbai-III to file an application in proper form with the Commissioner of Central Excise (Appeals), Mumbai in terms of sub-section (4) of Section 35E of Central Excise Act, 1944 with prayer to set aside the OIO No. 273/2001, dated 28-6-2001 passed by the then A.C.C.Ex., Vasai Division, Mumbai-III and/or to pass any other order on merits as deemed fit. Hence, the present appeal. 9. The Review appeal- application along with its enclosures was forwarded to the assessee vide this office letter of even No. dated 29-1-2002 and a personal hearing was also fixed on 26-3-2002. 10. The assessee, vide their letter dated 14-3-2002 filed their cross objections, inter alia stating that - (i) The duty paid by the 100% EOU was excise duty only. The procedure adopted for payment of this duty was 50% each of the duties of customs which would be leviable under Section 12 of the Customs Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inputs. The payment of the amount equivalent to the additional duty leviable under Section 3 of the Customs Tariff Act was on "such inputs" which were produced or manufactured in a 100% EOU/FTZ and were used in the manufacture of final products in any place in India. Also the specified duty as per Notification No. 21/99-C.E. (N.T.) was only the Additional duty of Customs which was leviable on like goods imported into India. Therefore, the intention of the notification seemed to be to restrict Modvat credit to the extent of the additional duty portion, which as actually paid. Logically, if the Modvat credit was allowed to be taken for the full amount of CVD leviable on such goods, this would lead to a situation where the domestic industry selling similar goods become unviable. 14. The aforementioned clarification issued by the said Ministry was considered by the Larger Bench of Hon'ble Tribunal in the case of Vikram Ispat v. CCE, Mumbai-III, 2000 (120) E.L.T. 800 (T-LB) in respect of erstwhile Notification No. 5/94-C.E. (N.T.), dated 1-3-1994 as amended, which was similarly worded as in the case of present Notification No. 21/99-C.E. (N.T.), dated 28-2-1999. Taking into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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