TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 209
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....tral Excise Tariff Act, 1985. The appellant is availing the Cenvat Credit of capital goods under the Cenvat Credit Rules, 2004. During the course of CERA Audit, it was noticed by the Auditor from the records and information made available by the appellant that they had purchased 'Status Holder Incentive Scrips' (SHIS) from the market during the year 2013-14 and 2014-15 and utilized the 'Scrips' for debiting the duty on imported capital goods and simultaneously availed Cenvat Credit on the said capital goods. It was also noticed by CERA officers from the Balance Sheet made available by the appellant that they had availed benefit of Rs. 11.42 Crores under Technology Upgradation Fund Scheme (TUFS) of Ministry of Textile during the year 2013-14 and of Rs. 7.42 crores during the year 201415. In chapter 3 para 3.16 of Foreign Trade Policy 2009-14, the Status Holders have been held entitled to incentive with certain conditions as mentioned in the policy document. As per the Notification No. 33/2012-CE dated 9th July, 2012, the Central Government exempted capital goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act 1985 when cleared against a 'Stat....
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.... Section 11A (4) of Central Excise Act, 1944; Interest at the appropriate rate should not be demanded from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 and penalty should not be imposed upon them under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 3.1 The Show Cause Notice was adjudicated by learned Commissioner Central Excise & Customs, Bharuch who vide order dated 30.11.2016 disallowed Cenvat credit of Rs. 5,86,55,614/- wrongly availed by the appellant and confirmed the demand of above Cenvat credit and ordered it's recovery from the appellant along with interest and also imposed penalty of Rs. 5,86,55,614/- upon the appellant. Feeling aggrieved from the impugned Order-in-Original dated 30.11.2016, the present appeal has been preferred before this Tribunal. 4. Learned Counsel for the appellant submitted that the learned Commissioner has not dealt with various submissions made by him while passing the impugned order and he has not given findings in respect of the said submissions. He argued that Learned Commissioner has mechanically brushed aside the submissio....
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....lar year whereas the entire case of the Revenue rests on the ground that appellants have availed benefit of SHIS and TUFS simultaneously which is factually incorrect. Therefore, the impugned order passed by the learned Commissioner is not sustainable and is liable to be set-aside. 5. Learned AR for the department reiterated the impugned order passed by learned Commissioner, and prayed that the impugned order may be upheld and the appeal of the appellant may be rejected. 6. We have heard the arguments from both the sides and perused the record. The issue involved in this appeal is whether the appellant have availed the benefit of Status Holders Incentive Scrips (SHIS) and Technology Upgradation Fund Scheme (TUFS) simultaneously which is in contravention of the Foreign Trade Policy. The appellant is a Status Holder falling within the category of "export House" and as per para 3.16.4 of Foreign Trade Policy, they are eligible to avail SHIS benefit under Textile and Jute Sector. However, the appellant never availed the benefit of SHIS on the basis of exports made by them. They purchased Status Holders Incentive Scrips from other license holders to whom these scrips have been issu....
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.....3 From the above, it is clear that appellant in the present case have not availed the benefit of SHIS on the basis of exports made by them. They purchased Status Holders Incentive Scrips from other license holders only to whom these SHIS were issued on the basis of exports made by them during the year 2009-10 to 2012-13 and not on the basis of exports made by the appellants. Even if the Status Holders Incentive Scrips would have been issued to the appellant, they could not have availed the benefit of SHIS for the period after 2012-13 since the benefit of scheme is available only in respect of exports made during the years 2009-10, 2010-11, 2011-12 and 2012-13. The appellant utilized SHIS for debit of duty in respect of capital goods imported during the period 2013-14 to 2015-16 and they did not avail benefit of SHIS on the basis of exports made by them during the period 201314 to 2015-16. The appellant have availed benefit of TUFS in 2013-14 but in the said year, the appellant have not availed the benefit of SHIS on the basis of exports made by them. In view of SHIS Scheme, the appellant could not have applied and obtained Status Holders Incentive Scrips in their name against the ....
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....tlement under the scheme; (ii) that the said scrip is produced before the proper officer of customs at the time of clearance for debit of the duties leviable on the goods, but for this exemption; (iii) that the said scrip shall be non-transferable and shall be used for import of capital goods relating to the sectors specified in condition (i) : Provided that, the capital goods specified in Appendix 37B of Hand Book of Procedures Vol. 1 shall not be allowed for import; (iv) that the capital goods imported against the said scrip shall be subject to actual user condition and the importer at the time of clearance of the said capital goods, shall furnish an undertaking to this effect to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that in case of non compliance of the said condition, he shall pay on demand an amount equal to the duty leviable, but for the exemption contained herein together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials; (v) that the imports and exports are undertaken through seaports at Bedi (including Rozi-Jamnagar), Che....
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....nst the amount debited in the said scrip. TABLE Sl. No. Description 1 EOUs/EHTPs/BTPs who are availing direct tax benefits or exemption. 2 Export of imported goods covered under para 2.35 of the FTP. 3 Exports through transshipment, meaning thereby that exports originating in third country but transhipped through India. 4 Deemed exports. 5 Exports made by Special Economic Zone units or Special Economic Zone products exported through Domestic Tariff Area units. 6 Export of items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS). 7 The exports made by the Status Holders during a particular year, if benefits are availed under Technology Upgradation Fund scheme (TUFS) of Ministry of Textiles in that year. 8 The exports made under the Zero duty EPCG scheme w.e.f 1st April, 12010. Explanation, - For the purposes of this notification,- (i) "Capital goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, tech....
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....der SHIS. Further, condition 8 of the Notification No. 104/2009-Cus dated 14.09.2009 provides that the importer shall be entitled to avail of the drawback or Cenvat credit of additional duty leviable under Section 3 of said Customs Tariff Act and against the amount debited in the said scrips. Relevant provisions of Cenvat Credit Rules, 2004 has been reproduced below. Rule 3(1) of the Cenvat Credit Rules provides that :- "A manufacturer or producer of final products is eligible to take Cenvat credit of the additional duty. leviable under Section 3 & 3(5) of the Customs Tariff Act, 1985, paid on any capital good received in the factory of manufacture of final product. Rule 4 of the said rules provides the conditions for allowing Cenvat credit. Rule 4(2) thereof provides that Cenvat credit in respect of capital goods may be taken on receipt of the capital goods in the factory of the manufacturer. It provides that 50% credit is to be taken in the financial year in which the capital goods are received and the balance 50% credit is to be taken in any of the subsequent financial years. Rule 9(1) lists the documents on the basis of which Cenvat credit can be taken. Cla....