Modvat credit on CVD debited to DEPB pass book was held inadmissible for the relevant import period.

Modvat credit was not available on countervailing duty discharged by debiting the DEPB pass book for imports made before the Cenvat Credit Rules, 2002 came into force. The Tribunal applied Larger Bench authority to hold that additional customs duty paid through DEPB adjustment did not qualify for credit during the relevant period from 24-9-1998 to 12-10-1998. The credit claimed on such CVD was therefore legally inadmissible, and the Revenue's challenge succeeded.

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Issues: Whether Modvat credit was admissible on the CVD debited to the DEPB pass book in respect of imports made during the relevant period.

Analysis: The dispute related to the period from 24-9-1998 to 12-10-1998, when the Cenvat Credit Rules, 2002 were not in force. The Tribunal followed the Larger Bench decisions which held that credit is not allowable on CVD debited to the DEPB pass book while clearing imported goods. The credit claimed on the additional duty of customs paid through DEPB adjustment was therefore not legally available for that period.

Conclusion: Modvat credit on the CVD debited to the DEPB pass book was not admissible, and the Revenue's challenge succeeded.

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