Appellant entitled to Cenvat credit for CVD paid through DEPB Scrip despite license issuance date.

The Tribunal held that the appellant is entitled to Cenvat credit for CVD paid through DEPB Scrip under Notification No. 96/2004-Cus, despite the issuance date of licenses under the old or new policy. The Tribunal referred to relevant judgments supporting the appellant's position and allowed the appeal, dismissing the revenue's appeal.

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Issues Involved:

1. Whether CVD paid through DEPB Scrip under custom Notification No. 96/2004 dated 17.05.2004 is available as Cenvat credit.

Summary:

Issue 1: Availability of Cenvat Credit for CVD Paid Through DEPB Scrip

The department's stance was that per para 4.3.5 of the Exim Policy, CVD paid through DEPB Scrip does not qualify for Cenvat credit as it is not considered a cash payment. The appellant imported raw materials and paid customs duty through DEPB under Notification No. 96/2004-Cus and similar notifications, and claimed Cenvat credit. The Commissioner dropped seven show cause notices but confirmed four, denying Cenvat credit due to a lack of evidence showing that licenses were issued under the new policy.

Appellant's Arguments:

The appellant argued that all show cause notices admitted the goods were cleared under Notification No. 96/2004-Cus, which explicitly allows Cenvat credit for CVD debited under DEPB. The old FTP 2002-2007, which was abolished, should not apply. Even if it did, it was amended to allow Cenvat credit for CVD paid through DEPB. The imports were assessed under Notification No. 96/2004-Cus, and the CVD payment through DEPB should be considered as duty payment in cash, as clarified by Board Circular No. 26/2007-Cus.

Respondent's Arguments:

The Respondent reiterated the grounds of the appeal and the findings of the impugned order.

Tribunal's Findings:

The Tribunal noted that during the relevant period (January 2005 to December 2011), Notification No. 96/2004-Cus was in effect, which allows Cenvat credit for CVD debited in DEPB. The Tribunal found that the imports were made under Notification No. 96/2004-Cus, and the licenses' issuance date (whether under the old or new policy) did not affect the eligibility for Cenvat credit. The Tribunal referred to judgments such as CCE Vs. Neel Kanth Rubber Mills and M/s. Havells India Ltd., which supported the appellant's position that Cenvat credit is allowable regardless of the policy under which the DEPB licenses were issued.

Conclusion:

The Tribunal concluded that the appellant is entitled to Cenvat credit and allowed the assessee's appeal while dismissing the revenue's appeal.

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