TMI Blog2010 (1) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of proviso to sub-section (1) of Section 3 of the Central Excise Act, 1944 (hereinafter referred as the Act); that the appellant should have taken the credit as per the formula given in clause (a) of sub-rule (7) of Rule 3 of Cenvat Credit Rules, 2004 (hereinafter referred as the Cenvat Rules) and it appears that the appellant has taken excess cenvat credit of Rs. 4,20,117/-; that basing on the above, a SCN dated 8-8-2008 was issued with proposal to deny the excess credit and recover the same under Rule 14 of the Cenvat Rules read with provisions of Section 11A of the Act, in addition with proposal to charge interest under Section 11AB of the Act read with Rule 14 of the Cenvat Rules and penalty under Section 11AC of the Act read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the formula which clearly mentions only the additional duty of customs; (iv) that it is evident from the Customs Tariff Act that there are two types of additional duty of customs leviable i.e. the first one is chargeable under Section 3(1) equivalent to duty of excise and second one under Section 3(5) of the Customs Tariff Act equivalent to sales tax, value added tax, local tax or any other charges for the time being leviable on a like article produced in India on its sale or purchase etc. and hence can be concluded that CVD or additional duty customs mentioned in the formula will mean both the component of additional customs duties wherever payable; (v) that if the EOU does not sell goods in DTA, they will pay 4% SAD under Section 3( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s plea that the special additional duty (SAD) paid under Section 3(5) of Customs Tariff Act, was not to be included in the formula given under Rule 3(7)(a) of the Cenvat Credit Rules holding that only the additional duty paid under Section 3(1) of the Customs Tariff Act, 1975 is to be taken as CVD as per the above formula. Whereas the appellant claims that as per Section 3 of the Customs Tariff Act, there are two additional duties i.e. one under sub-section (1) of 3 which is equivalent to excise duty payable on like goods produced in India and another under sub-section (5) of 3 which is special additional duty (SAD) in lieu of sales tax, VAT and other taxes payable on like goods produced or manufactured in India, shall be payable; that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote ad valorem rates, in per cent, of Basic Customs duty and additional duty of customs leviable on the inputs or the capital goods respectively and X denotes the assessable value. Provided that the CENVAT credit in respect of inputs and capital goods cleared on or after 1st March, 2006 from an export oriented undertaking or by a unit in Electronic Hardware Technology Park or in a Software Technology Park, as the case may be, on which such unit pays excise duty under Section 3 of the Excise Act read with serial number 2 of the Notification No. 23/2003-Central Excise dated 31st March, 2003 (G.S.R. 266 (E), dated the 31st March, 2003) shall be equal to X multiplied by (1+BCD/400) multiplied by (CVD/100). 4.2 From the above rule, it may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in India suffer domestic duties, the goods imported also should bear the brunt. In fact, it is interesting to note that section 3 (5) contain the words counter balance the sales tax VAT etc; but no such words found in Section 3(1) of the Customs Tariff Act. Hence there is no justification to leave additional duty leviable under Section 3(5) from the formula contained in Rule 3(7)(a) of the Cenvat Rules. Another lacuna is that the impugned OIO does not discuss the plea put forth by the appellant while replying to the SCN to his satisfaction. As contended by the appellant, the annexure to the SCN which contains excess credit payable by the appellant, does not disclose the method/formula by which the appellant is liable to pay excess credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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