Cenvat credit computation includes both customs duties under the relevant tariff provisions, supporting interim stay relief.

Under Rule 3(7)(a) of the CENVAT Credit Rules, the term CVD was treated, prima facie, as covering both additional duty of customs under Section 3(1) and the special additional duty under Section 3(5) of the Customs Tariff Act, supported by Board Circular No. 818/15/2005-CX. On that basis, both levies were to be considered while computing eligible Cenvat credit, and the appellant was found to have a strong case for interim relief. Waiver of pre-deposit of the balance dues and stay of recovery were therefore granted pending disposal of the appeal.

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Issues: Whether, for computing the eligible Cenvat credit under Rule 3(7)(a) of the CENVAT Credit Rules, the term CVD includes both additional duty of customs under Section 3(1) and the special additional duty under Section 3(5) of the Customs Tariff Act, and whether the appellant was entitled to waiver of pre-deposit and stay of recovery.

Analysis: The term CVD was not specifically defined in the CENVAT Credit Rules. Board Circular No. 818/15/2005-CX dated 15.7.2005 treated the 4% levy under Section 3(5) of the Customs Tariff Act as CVD/Special CVD. Relying on the cited Tribunal decision, the Tribunal held, prima facie, that both levies should be taken into account while determining the eligible credit under Rule 3(7). On that basis, the appellant was found to have made out a strong case for relief at the stay stage.

Conclusion: The appellant was entitled to waiver of pre-deposit of the balance dues and stay of recovery pending disposal of the appeal.

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