Cenvat credit on DEPB debit for additional customs duty was admissible under the applicable import notification and policy.

Cenvat credit was available on additional customs duty paid by debit in DEPB scrips under Notification No. 96/2004-Cus., because the notification expressly allowed such credit for imports cleared during its currency. The Foreign Trade Policy 2004-09 also recognised adjustment of additional customs duty paid in cash or through DEPB debit as Cenvat credit, so credit could not be denied by relying on an earlier policy. Where the bills of entry were assessed under the notification, the operative entitlement to credit followed, and the record did not show that the licences were of a type excluding the benefit. The denial of Cenvat credit was therefore not sustainable.

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Issues: Whether CVD paid by debit in DEPB scrips under Notification No. 96/2004-Cus. was eligible for Cenvat credit, irrespective of the foreign trade policy under which the scrips were issued.

Analysis: The imports were cleared during the currency of Notification No. 96/2004-Cus. dated 17.09.2004, which expressly provided that the importer would be entitled to avail Cenvat credit of the additional duty debited in the DEPB. Para 4.3.5 of the Foreign Trade Policy 2004-09 also provided that additional customs duty paid in cash or through debit under DEPB would be adjusted as Cenvat credit. Since the bills of entry were assessed under the said notification, the availability of credit could not be denied by invoking the earlier policy. The record also did not establish that the licences were of a kind that excluded the benefit.

Conclusion: The credit was admissible and the denial of Cenvat credit was not sustainable.

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