2012 (10) TMI 452 - HC - Central Excise

Demand of Cenvat credit in respect of Special Additional Duty of Customs debited in Target Plus/DEPB Scheme - manufacture of Safety Razor Blades Held that - Duty debited through DEPB, DFCE, Target Plus etc. schemes would be eligible for Cenvat benefit or drawback facility by the licensed holder and full credit of the 4% Special CVD will be allowed to manufacturers of excisable goods and further clarified that 4% CVD duty debited in DEPB, EFCE, Target Plus etc. certificates may be allowed to be taken back at draw back (brand rate) demand set aside

Summary

Issues:
1. Appeal under Section 30(G) of the Central Excise Act, 1944 against the final order of the Customs, Excise and Service Tax Appellate Tribunal.
2. Dispute regarding demand notice issued to manufacturers of Safety Razor Blades seeking Cenvat credit availed in respect of Special Additional Duty of Customs debited in Target Plus/DEPB Scheme.
3. Interpretation of Circular No. 18/2006-Cus. regarding eligibility of duty debited through various schemes for Cenvat benefit or drawback facility.
4. Application of earlier decisions by the CESTAT in similar cases to determine the outcome of the appeal.

Analysis:

1. The appeal was filed by the revenue under Section 30(G) of the Central Excise Act, 1944 against the final order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore. The appeal challenged the dismissal of the revenue's appeal by the Tribunal in Appeal No. Excise/1140/2009. The appeal stemmed from the Order-in-Appeal No. 08 of 2009 dated 30-9-2009, passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals), Hyderabad.

2. The dispute in this case revolved around a demand notice issued to the respondents who were manufacturers of Safety Razor Blades. The demand sought recovery of Cenvat credit availed by the respondents in relation to the Special Additional Duty of Customs debited in schemes like Target Plus/DEPB Scheme. The adjudicating authority initially dropped the proceedings initiated by a show cause notice, leading the Revenue to appeal before the Commissioner (Appeals). The appellate authority, citing a previous decision of the CESTAT, dismissed the appeal and upheld the Order-in-Original, prompting the Revenue to further appeal to the CESTAT.

3. The CESTAT, in its decision, relied on Circular No. 18/2006-Cus. dated 5-6-2006, which clarified the eligibility of duty debited through schemes like DEPB, DFCE, Target Plus for Cenvat benefit or drawback facility. The Circular specified that the 4% Special CVD duty debited in such certificates may be allowed to be taken back at draw back (brand rate). The CESTAT, in alignment with its earlier decisions and the Circular, found no substantial question of law for consideration in the appeal, affirming the correctness of the calculations by the authorities based on the Circular and previous Tribunal decisions.

4. Ultimately, the appeal was dismissed at the stage of admission as it was deemed to be without merits. The judgment highlighted the application of Circular No. 18/2006-Cus. and earlier decisions by the CESTAT in similar cases as the basis for the dismissal of the appeal. No costs were awarded in this matter.