TaxTMI 
TaxTMI 
2026 (3) TMI 908
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....the adjudicating authorities demanding duty and also imposing penalty (impugned order). 2. The brief facts of the case are that the appellants are engaged in manufacture of Hydrogen Peroxide and were also, inter alia, availing credit of Customs Duty, Counter Vailing Duty (CVD) and Special Additional Customs Duty paid on import of goods. The appellant availed Cenvat credit on Special Additional Duty (SAD) imposed under section 3(5) of Customs Tariff Act (CTA), 1975, which was adjusted against various licenses issued to them under DEPB schemes. The department felt that Notification No. 89/2005-Cus dt.04.10.2005 provided only for taking credit of duty paid as CVD equivalent to Central Excise Duty leviable under section 3(1) of CTA and not S....
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....12 (281) ELT 682 (AP)]. She has also submitted that extended period cannot be invoked as the issue is that of interpretation. She has also relied on various judgments in this regard as under. a) CCE Vs MTZ Polyfilms Ltd [2010 (256) ELT 539 (Guj)] b) UOI Vs Bharat Aluminium Co Ltd [2016 (344) ELT 1153 (Chhattisgarh)] 4. She has further submitted a statement showing that the licenses were issued in terms of prevailing policy starting from 04.09.2007 to 18.08.2008. 5. Learned AR, on the other hand, has reiterated the findings of the Commissioner (Appeals). 6. Heard both sides and perused the records. 7. We find that the core issue to be decided in this matter is whether the appellants could have taken credit in re....
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....ng credit the duty must be paid only in cash and that duty paid through other means and schemes cannot be taken as credit. Therefore, once the SAD is paid by adjustment in the scrips issued under DEPB scheme, which has been levied in terms of section 3(5) of CTA, the same would be available as Cenvat credit. The reliance has been placed her on various judgments, inter alia, as under. a) CCE, Hyderabad Vs Aurobindo Pharma Ltd [2010 (261) ELT 594 (Tri- Bang)] b) CCE, Hyderabad-IV Vs RCC Sales (P) Ltd c) CCE, Ludhiana Vs Neel Kanth Rubber Mills [2010 (254) ELT 203 (P&H)] 8. We find that the licenses have been issued during the period September, 2007 to March, 2009. During this period, both EXIM policy 2002-07 and ....
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....ibed that the importer will be entitled to avail drawback or Cenvat credit of Additional Customs Duty levied under section 3 of CTA against the amount debited in the Duty Entitlement Pass Book (DEPB). Para 4 of the Circular No.18/2006-Cus dt.05.06.2006 is cited below for ease of reference. "4. As regards the issue raised as to whether the duty debited through DEPB, DFCE, Tartget Plus etc. schemes would be eligible for Cenvat benefit or drawback facility by the licence holder, it has been made clear in the Finance Minister's Budget Speech that full credit of the 4% special CVD will be allowed to manufacturers of excisable goods. Therefore, it is clarified that the 4% CVD duty debited in DEPB, DFCE, Target Plus etc. certificates may ....
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....t benefit or draw back facility by the licensed holder, it has been made clear in the Finance Minister's Budget speech that full credit of the 4% Special CVD will be allowed to manufacturers of excisable goods. Therefore it is clarified that the 4% CVD duty debited in DEPB, EFCE, Target Plus etc, certificates may be allowed to be taken back a drawback (brand rate). It may be mentioned here that under the Foreign Trade policy, additional customs duty (CVD) debited in DEPB scrips/certificates issued under reward schemes is allowed to be taken as cenvat/draw back"." 10. In fact, in the case of Neel Kanth Rubber Mills (supra), the Hon'ble High Court of Punjab & Haryana, inter alia, held that even for the period prior to the amendment i.e., 2....
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....PB Scheme." 11. Therefore, in view of the above, we find that there is no infirmity in availing Cenvat credit by the appellant in respect of CVD/SAD paid by way of debiting the DEPB scrips. Moreover, the reliance of the department that the said relaxation was only in respect of amended provisions in terms of new FTP i.e., EXIM policy 2004-09 w.e.f. 28.01.2004 is incorrect. We find that the appellants have submitted that all the licenses were issued in terms of amended policy and not in terms of old policy and therefore, on this count also, the credit cannot be denied. We find that the reliance placed by the appellant on the judgment of Hon'ble High Court of Punjab & Haryana in the case of Neel Kanth Rubber Mills (supra) is relevant, wher....