Appellant Granted Cenvat Credit Despite Duty Deduction in DEPB Passbook

The appellant was allowed to avail cenvat credit on imported inputs despite countervailing duty being deducted in the DEPB passbook. The Court held that the appellant could claim the credit regardless of the policy under which the DEPB was issued. The judgment emphasized the consistent interpretation by various High Courts on this issue, setting aside the impugned order and ruling in favor of the appellant's entitlement to the cenvat credit.

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Issues:
1. Eligibility of cenvat credit on imported inputs with countervailing duty deducted/adjusted in DEPB passbook.

Analysis:
The appeal in question challenges the eligibility of cenvat credit availed by the appellant on imported inputs where the countervailing duty was deducted/adjusted in the DEPB passbook. The appellant contended that during the period in question, they were entitled to avail the cenvat credit, while the Revenue argued that as the DEPB scripts used were issued under the Exim Policy 2002-07, the appellant was not eligible for the credit. The appellant had discharged the countervailing duty through DEPB scrips and utilized the goods in manufacturing. The issue was considered in light of a similar case by the Hon'ble High Court of Punjab & Haryana in the case of Neel Kanth Rubber Mills, where it was held that an importer could avail the cenvat credit of additional duty against the amount debited in DEPB, irrespective of the policy under which the DEPB was issued.

2. Interpretation of Notification No. 96/2004-Cus. regarding CENVAT credit against DEPB debits.

The judgment also delves into the interpretation of Notification No. 96/2004-Cus. which allowed importers to avail drawback or CENVAT credit of additional duty against the amount debited in DEPB issued under specific Foreign Trade Policies. The Department argued that CENVAT credit could only be availed if the DEPB was issued under the FTP of 2004-09, not the earlier policy. However, the High Court referred to the amended EXIM Policy and held that there was no condition restricting credit eligibility based on the policy under which the DEPB was issued. The Court dismissed the appeals by the Department, emphasizing that no substantial question of law arose, and the issue had already been settled in favor of the Assessee.

In conclusion, the judgment highlights the consistent interpretation by different High Courts regarding the eligibility of cenvat credit against DEPB debits, irrespective of the policy under which the DEPB was issued. The impugned order was set aside, and the appeal was allowed in favor of the appellant, emphasizing the entitlement of the appellant to avail the cenvat credit in the given circumstances.

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