TaxTMI 
TaxTMI 
2019 (9) TMI 833
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....iling the facility of credit of duty paid on inputs capital goods and service tax paid on input services. During the course of scrutiny of records it was found that appellants have availed higher CENVAT credit on inputs received from Exported Oriented Units as detailed below: (i) The assesses have availed excess credit on the goods received as inputs from Export Oriented Unit over and above the formula prescribed under Rule 3(7)(a) of the CENVAT Credit Rules 2004 (CCR in short) and (ii) The assesses have availed credit of SAD paid by EOU describing it as additional duty of customs payable in terms of Section 3(5) of the Customs Tariff Act, 1974, for which they are not eligible in terms of Rule 3(1) of the CENVAT Credit Rul....
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....e normal period has been reversed by the appellant on being pointed out by the department. The availment of excess credit on inputs was only due to the error in calculation and applying incorrect formula and therefore the appellant cannot be held guilty of suppression of facts with intention to evade payment of duty. He prayed that the invocation of extended period is without basis. With regard to the credit availed on SAD, he submitted that the issue stands settled by the followings decisions: i. Sri Venkateshwara Precision Components Vs CCE Chennai [2010 (258)ELT 553 Tri(Che) ii. Metaclad Industries Vs CCE Mumbai [2013(289) ELT 381 (Tri-Mum)] iii. Zabatex Textiles India Pvt Ltd Vs CCE & ST Vapi [2016(336)ELT 75 ....
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....but for the scrutiny done by the department. Therefore, the appellant is guilty of suppression facts with intention to evade payment of duty and therefore, the invocation of extended period is correct and proper. 4.2. The argument put forward by the learned counsel with regard to the demand of interest on credit reversed before utilisation, was countered by the learned A.R by relying on the decision in the case of Commissioner of Central Excise & Customs Raipur Vs Vandana Vidyut Ltd [2016 (331)ELT 231(Chhattisgarh) and CC, C.Ex & ST Coimbatore Vs SriKumaran Alloys (P) Ltd [2019(365) ELT 305 (Mad). 5. Heard both sides. 6.. The first issue is with regard to the excess credit availed on inputs received from the EOU by the appellant. O....
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....vailed on SAD. The decisions relied upon by the learned counsel for the appellant has clearly analysed the said issue for the period post 07.09.2009 as well as prior to 07.09.2009. The relevant paragraph in the case of Metaclad industries is reproduced for better appreciation as under: 5.2 There are two reasons for allowing such credit. One is economic and the other is legal. First the economic reason. Cenvat (value added tax) is an economic concept and the object is to minimize/eliminate the cascading effect of taxes. If this objective has to be realized, then full credit of the duties paid at the previous stage has to be allowed. Further, if credit of the entire excise duty paid by an EOU is not allowed and the same is restricted....
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....n the inputs or the capital goods respectively and X denotes the assessable value" The expression additional duty of customs leviable is not qualified by any other term. Now there are two additional duties of customs leviable under Section 3 of the Customs Tariff Act under sub-section (1), an additional duty of customs is levied which is equal to the excise duty levied on like articles produced in India. Under sub-section (5), another additional duty of customs is levied at a rate not exceeding four per cent. of the value of the imported articles so as to counterbalance the sales tax/value added tax or any other charges on a like articles on its sale, purchase or transportation in India. Both the levies are "additional duty of cust....
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....d whether under sub-section (5) of Section 3 or under section (1) of Section 3 are eligible as CENVAT credit as the expression used is additional duty of customs and it does not differentiate between the two additional duties. The Revenue had not been able to place before me any contrary decision in support of their argument that the additional duty paid under sub-section (5) of Section 3 is not available as Cenvat credit. Therefore, the ratio of the decisions relied upon by the appellants, is squarely applicable to the facts of present case. 6. In the light of these discussions, I hold that the appellants are rightly entitled for the credit of all the additional duties of customs paid by the EOU under Section 3 of the Customs Tari....