Cenvat credit on inputs from a 100% EOU cannot be restricted to CVD alone where the rules refer to duty paid.

Credit on inputs sourced from a 100% Export Oriented Unit was held to be available under the Cenvat Credit Rules, 2004, because the relevant wording referred to duty "paid" rather than restricting credit to the CVD component alone. The Tribunal followed its earlier decision on the method of calculation and held that the lower authorities were not justified in treating that precedent as inapplicable. On that basis, denial of credit on the ground that Rule 3(6) limited entitlement only to CVD paid was unsustainable, and the assessee was entitled to the credit claimed.

---

---

Issues: Whether credit on inputs purchased from a 100% Export Oriented Unit was to be denied on the ground that Rule 3(6) of the Cenvat Credit Rules, 2004 restricted credit only to the extent of CVD paid.

Analysis: The dispute concerned the method of computing credit on inputs sourced from a 100% EOU. The Tribunal noted that the relevant wording in the applicable rules used the expression "paid" and that the earlier Tribunal decision on the method of calculation remained applicable. The lower authorities were therefore not justified in treating that decision as inapplicable and in denying the credit on the basis that the rule limited credit only to the CVD component.

Conclusion: The denial of credit was unsustainable and the assessee was entitled to the credit claimed.

---