TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 1268
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....llant was dis-entitled to Cenvat Credit merely on the strength of the Exim policy as in force?" 2. Heard Mr.C.Saravanan, learned counsel for the appellant and Mr.E.Vijay Anand, learned Central Government Standing Counsel for the respondent. 3. The appellant is engaged in the manufacturer of glass bottles falling under Tariff sub-heading No.7007.90 of the First Schedule to the Central Excise Tariff Act, 1985. 4. The appellant imported certain raw-materials under a Bill of Entry dated 25.1.2003 and availed Cenvat Credit on the additional duty of customs to the tune of Rs. 3,88,894/-. The appellant availed the benefit of the Notification No.34/97-Cus. dated 7.4.1997 and cleared the goods by debiting the DEPB for both customs duty payable u....
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....ke credit based merely upon the debit entry in the passbook under DEPB Scheme. The Original Authority, as stated earlier, relied upon the decision of a Larger Bench of CESTAT in ESSAR Steel Limited. The Appellate Authority followed its own order in an identical case in Appeal No.80 of 2005 passed in the case of Spic Pharmaceuticals Division, Cuddalore. In the said case also, the Appellate Commissioner had taken a view that a debit entry in the Passbook cannot be equated to payment in cash. The Appellate Commissioner had further held that a duty not paid and specifically exempted cannot be taken as paid because of debit entries. 9. The Tribunal relied upon para 7.4.1 of the Exim Policy, as it was in force at the relevant time and held that ....
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.... are exempt subject to the conditions that the duties leviable on the goods are debit from DEPB. In other words, in the case of DEPB Scheme, though the imports are governed by an exemption Notification, the fact remains that in case of such imports duty is debited from the DEPB Scrip". 11. It is no doubt true, that under para 4.3.2, the holder of DEPB has the option to pay additional customs duty, in cash as well. Under para 4.3.5 of the Exim Policy, it was stated as follows:- "4.3.5 Normally, the exports made under the DEPB Scheme shall not be entitled for drawback. However, the additional customs duty/excise duty paid in cash on inputs under DEPB shall be adjusted as CENVAT Credit or Duty Drawback as per rules framed by the Department ....
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.... the appellant was not entitled to Cenvat Credit. Hence, the question of law raised by the appellant has to be answered in their favour. 14. But as pointed out by the learned Standing Counsel for the Revenue, DEPB Scheme was actually introduced in the Exim Policy, to neutralize the incidence of customs duty on import content of export products. The credit itself is available against exports products. What is refundable under Rule 5 of the Cenvat Credit Rules, 2002, is actually of "such amount" and hence the same can be relatable only to the payment. 15. Though the appellant claimed to have availed the benefit of exemption under Notification No.34/97, and cleared the goods by debiting DEPB, for both customs duty as well as additional custo....
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....r by any High Court. But according to the learned counsel for the appellant, the decision of the Larger Bench was watered down to a great extent by this Court in Commissioner of Central Excise v. Spic Limited [2014 (305) ELT 484]. 20. But a careful look at the decision in Spic would show that the case related to imports made prior to the year 2000. In paragraph 16 of the decision in Spic, the Court pointed out as follows: "16. It is no doubt true that under the Scheme available from 1.4.2000, there is a specific prohibition that wherever the additional customs duty is adjusted from DEPB, the assessee would not be entitled to Cenvat/Drawback. However, in the absence of any such specific prohibition for the period prior to 2000, considerin....