2014 (7) TMI 1052 - AT - Central Excise

Tribunal grants Cenvat credit on special duty, dismissing Revenue's challenge.

The Tribunal allowed the appeals filed by the appellant, confirming their eligibility for Cenvat credit on special additional duty (SAD)/special CVD at ... Cenvat credit of special additional duty (SAD)/special CVD - admissibility of duties specified under rule 3 of the Cenvat Credit Rules, 2004 - Notification No. 13/2005-CE (N.T.) dated March 1, 2005 inserting clause (viia) - proof of payment recorded in dealer's invoicesCenvat credit of special additional duty (SAD)/special CVD - Notification No. 13/2005-CE (N.T.) dated March 1, 2005 inserting clause (viia) - Whether Cenvat credit on special additional duty (SAD)/special CVD leviable under sub section (5) of section 3 of the Customs Tariff Act was admissible to the manufacturer during the relevant period. - HELD THAT: - The Cenvat Credit Rules, 2004 were amended by Notification No. 13/2005-CE (N.T.), dated March 1, 2005 by inserting sub-clause (viia) which expressly included the additional duty leviable under sub section (5) of section 3 of the Customs Tariff Act in the list of duties eligible for Cenvat credit (subject to the proviso relating to service providers). The period in dispute is subsequent to that amendment. Applying that amendment, the Tribunal held that SAD/special CVD at four per cent levied under sub section (5) of section 3 was a duty eligible for Cenvat credit and therefore, in principle, admissible to the manufacturer for the relevant period.Cenvat credit of SAD/special CVD at four per cent was admissible to the appellant for the relevant period in view of the insertion of clause (viia) by Notification No.13/2005.Proof of payment recorded in dealer's invoices - admissibility of credit where department acknowledged invoices - Whether the appellant's alleged failure to produce additional documentary certificates disentitled them to Cenvat credit where dealer's invoices recorded the SAD/special CVD. - HELD THAT: - The adjudicating authority and the Commissioner (Appeals) treated non production of certificates and questioned payment by the importer as grounds to deny credit. The Tribunal observed that the show cause notice and order in original acknowledged that the appellant had availed credit on the basis of dealer's invoices which recorded that the duty was levied and paid by the importer. Since the Department had accepted that the dealer's invoices showed the SAD/special CVD discharged by the importer, the Tribunal found no warrant to deny credit on the ground of non production of further certificates in the circumstances of this case.Absence of additional certificates did not preclude grant of Cenvat credit where the department's own records acknowledged payment of SAD/special CVD in the dealer's invoices.Final Conclusion: The Commissioner (Appeals) order is set aside; the appeals are allowed and Cenvat credit of the special additional duty/special CVD at four per cent availed by the appellant for the stated periods is held admissible in view of Notification No.13/2005 and the documentary position in the dealer's invoices. Issues:- Eligibility of Cenvat credit on special additional duty (SAD)/special CVD at four per cent under the Customs Tariff Act.- Interpretation of Notification No. 13/2005-CE (N.T.) and its applicability to the case.- Requirement of relevant documents to establish payment of special additional duty (SAD)/special CVD.- Observance of Cenvat Credit Rules, 2004 in allowing Cenvat credit.Analysis:The case involved two appeals filed against orders passed by the Commissioner of Central Excise (Appeals) concerning the eligibility of the appellant to avail Cenvat credit on special additional duty (SAD)/special CVD at four per cent under the Customs Tariff Act. The appellant, engaged in manufacturing excisable goods, had availed Cenvat credit on the mentioned duty, which was challenged through show cause-cum-demand notices. The issue revolved around the admissibility of this duty as Cenvat credit, as it was not initially specified under rule 3 of the Cenvat Credit Rules, 2004.The appellant contended that an amendment to the Cenvat Credit Rules through Notification No. 13/2005-CE (N.T.) made the special additional duty (SAD)/special CVD eligible for Cenvat credit. The appellant relied on a previous tribunal judgment to support this argument. Conversely, the Revenue argued that the appellant failed to provide sufficient evidence, such as relevant documents and certificates, to establish the payment of the duty, rendering them ineligible for Cenvat credit.Upon review, the Tribunal found that the amendment to the Cenvat Credit Rules indeed included the special additional duty (SAD)/special CVD at four per cent under the Customs Tariff Act as eligible for Cenvat credit. The Tribunal dismissed the Revenue's argument regarding lack of evidence, noting that the Department acknowledged the appellant's availing of Cenvat credit based on dealer's invoices where the duty was paid by the importer. The Tribunal emphasized that the issue was solely about the admissibility of the duty as Cenvat credit, which was clarified by the inclusion of the duty in the Cenvat Credit Rules post-amendment.Ultimately, the Tribunal set aside the order-in-appeal passed by the Commissioner (Appeals) and allowed the appeals filed by the appellant, affirming their eligibility for Cenvat credit on the special additional duty (SAD)/special CVD at four per cent under the Customs Tariff Act.