2008 (10) TMI 534 - AT - Central Excise

Summary

Issues involved: The judgment involves the interpretation of Cenvat credit rules regarding the payment of duty through the Duty Entitlement Pass Book (DEPB) scheme and the availability of Cenvat credit for the duty paid through DEPB.

E/569/2005 - M/s. Binani Zinc Ltd. v. CCE:
- The appellant imported goods under the DEPB scheme and debited the Countervailing Duty (CVD) from the DEPB Pass Book, claiming Cenvat credit for the same.
- The Revenue contested the Cenvat credit claiming it was not permissible under the EXIM Policy during the relevant period.
- The Original Authority confirmed the duty demands and penalties, while the Commissioner (Appeals) set aside the penalties but upheld the duty demand based on interpretation.
- The appellant argued that debiting through DEPB constitutes payment of duty and entitles them to Cenvat credit, citing relevant case law and policy changes.

E/233/2006 & E/234/2006 - M/s. Merchem Ltd. v. CCE&C (Appeals), Kochi:
- Similar to the first case, the appellants imported goods under the DEPB scheme and claimed Cenvat credit for the CVD debited from the DEPB Pass Book.
- The Commissioner (Appeals) set aside the penalties but confirmed the duty demands based on interpretation.
- The appellant relied on case law and policy changes to support their claim for Cenvat credit.

Judgment Summary:
- The Tribunal consolidated the appeals due to a common question of law and facts regarding Cenvat credit for duty paid through DEPB.
- The appellants argued that debiting CVD through DEPB constitutes duty payment and entitles them to Cenvat credit, citing relevant case law and policy changes.
- The Larger Bench precedent indicated that Cenvat credit is not allowed when duty is debited through DEPB under an exemption notification.
- The Tribunal noted the Government's policy during the relevant period disallowed Cenvat credit for duty paid through DEPB, and changes in policy did not have retrospective effect.
- The Tribunal upheld duty demands but set aside penalties considering the interpretation issue and the appellant's reliance on favorable case law.
- The judgment was pronounced on 15-10-2008 by the Tribunal.