2007 (8) TMI 524 - AT - Central Excise

Summary

Issues involved: Entitlement to CENVAT credit on duty paid by a 100% EOU on goods cleared to Domestic Tariff Area (DTA).

The Appellate Tribunal CESTAT, Chennai, in the case, addressed the issue of entitlement to CENVAT credit on duty paid by a 100% EOU on goods cleared to DTA. The appellants had received halogen lamps from a 100% EOU and claimed CENVAT credit of the entire duty paid. However, the authorities restricted their entitlement to an amount equal to the additional duty of customs (CVD) which formed part of the duty of excise paid by the EOU. The Tribunal noted that the duty paid by a 100% EOU on goods cleared to DTA is a duty of excise, and the buyer is entitled to MODVAT/CENVAT credit of that duty. The Tribunal referred to previous decisions supporting this position, including Final Order No. 462/2004 in the case of India Japan Lighting Ltd. The Tribunal held in favor of the appellants, setting aside the impugned order and allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that the duty paid by a 100% EOU on goods cleared to DTA is a duty of excise, entitling the buyer to CENVAT credit. The decision was based on established legal principles and previous Tribunal rulings, ultimately setting aside the previous order and allowing the appeal.