2012 (11) TMI 863 - AT - Central Excise

Court allows appellants to claim cenvat credit for duty debited in DFCE under Notification No. 53/03-Cus

CCE, Bhopal Versus M/s Birla Ericsson Optical Ltd

CCE, Bhopal Versus M/s Birla Ericsson Optical Ltd - TMI Issues:1. Availability of cenvat credit for duty debited in Duty Free Credit Entitlement Certificates (DFCE) under Notification No. 53/03-Cus.Analysis:The case involved the appellants who imported cut-tobacco, an input necessary for their final product, and paid customs duty using Duty Free Credit Entitlement Certificates (DFCE). The appellants claimed cenvat credit of countervailing duty paid through these certificates under Notification No. 53/03-Cus. The Revenue contended that since no cash duty was paid, cenvat credit should not have been availed based on the debit entry in the certificates. A show cause notice was issued for recovery, which was upheld by lower authorities. The appellants argued that Notification No. 53/03-Cus was amended by Notification No. 97/04-Cus, introducing condition 7 allowing for drawback or cenvat credit against the amount debited in the certificate. The Ministry's Circular no. 27/06-Customs clarified this position. However, the lower authority held that the benefit was effective only from the date of the Circular, not the amendment of the Notification.Upon hearing both sides, the judge, Mr. Mathew John, found no merit in Revenue's argument against availing cenvat credit for duty debited in DFCE certificates. He noted that clause 7 was incorporated in Notification No. 53/03 dated 1.4.03 with effect from 17.11.2004, allowing for cenvat credit against duty debited in the certificates. The judge emphasized that this provision should be effective from the date of its introduction. As the import in question was made after 17.11.2005, the judge allowed the appeal filed by the appellants, granting them consequential relief.