Cenvat credit on special additional duty debited under export schemes supported waiver of pre-deposit and stay of recovery.

Credit was treated as prima facie available where special additional duty had been discharged by debit under the relevant export schemes, because Customs had completed assessment without objection and the dispute arose only on audit. Circular No. 27/2006-Cus. and Para 3.7.7 of the EXIM Policy both supported adjustment of additional customs duty paid by cash or by debit as Cenvat credit or duty drawback. On that basis, a strong prima facie case was found, and complete waiver of pre-deposit with stay of recovery was granted pending appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery in respect of the demand raised on the ground that credit was wrongly taken of the amount debited towards special additional duty paid under import schemes.

Analysis: The appellant had imported goods and discharged special additional duty by debiting licences under the relevant export schemes. The assessment had been completed by Customs without objection, and the dispute arose only after audit. The Board's Circular No. 27/2006-Cus. dated 13-10-2006 clarified that additional customs duty paid in cash or through debit under the scheme may be adjusted as Cenvat credit or duty drawback. Para 3.7.7 of the EXIM Policy also supported availability of Cenvat credit on such debit. On this material, the appellant established a strong prima facie case.

Conclusion: Complete waiver of pre-deposit was granted and recovery of the demand was stayed till disposal of the appeal.

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