Cenvat credit on countervailing duty debited through DEPB scrips was permitted under the amended EXIM Policy and notifications.

The amended EXIM Policy, effective from 28.01.2004, removed the earlier restriction on DEPB-based availment of credit, and the notifications in force for July 2004 to September 2004 permitted an importer to take Cenvat credit of additional duty debited through DEPB scrips. Binding High Court authority had already held that such credit could not be denied on the Revenue's stated basis. On that footing, the appellant was eligible to avail Cenvat credit of the countervailing duty paid through DEPB debit, and the disallowance of credit was unsustainable.

---

---

Issues: Whether the appellant was entitled to avail Cenvat credit of countervailing duty paid through debit in DEPB scrips during the relevant period, in view of the EXIM Policy amendment and the accompanying notifications.

Analysis: The relevant period was July 2004 to September 2004. The policy restriction on DEPB, earlier found in the EXIM Policy, had been deleted by amendment with effect from 28.01.2004. The amended policy and the notifications governing the period permitted an importer to avail Cenvat credit of additional duty debited through DEPB, and the issue stood covered by binding High Court decisions holding that credit could not be denied on the basis suggested by the Revenue.

Conclusion: The appellant was eligible to avail Cenvat credit on the countervailing duty paid through DEPB debit, and the disallowance of credit was unsustainable.

---