2014 (3) TMI 491 - AT - Customs

Re credit - Allowance of CENVAT Credit - Liveliness of DEPB scrip - whether such credit can be allowed on a live scrip or even though the scrip had expired credit can be allowed on that scrip - Held that - in cases where such re-credit has been allowed, parties have to file manual bills of entry according to Board would show that Board has taken this aspect into consideration. In the case of DEPB bills it may not be possible to allow to utilize the re-credit given by the DGFT in respect of DEPB scrips in respect of EDI Bills. Therefore this instruction appears to have been given. Therefore the only question that has arisen in this case as to whether the credit should be allowed on the live scrip or even on the expired scrip, credit can be allowed is answered by the Board itself though indirectly. Under these circumstances, the impugned order is set aside and the matter is remanded to original authority who shall allow re-credit on each of the scrip without looking into whether DEPB scrip has expired or not expired and thereafter it is left to the assessee/importer to go to the DGFT and get the credit and take further course of action as they deem fit - Decided in favour of assessee.

Summary

Issues Involved:
1. Whether credit for SAD paid through DEPB scrip should be allowed on relevant scrip or a single DEPB scrip.
2. Whether credit can be allowed on a live DEPB scrip or even on an expired DEPB scrip.

Analysis:
1. The primary issue in the present appeals is whether the refund of Special Additional Duty (SAD) paid by the appellant through Duty Entitlement Pass Book (DEPB) scrip should be allowed by quoting the relevant scrip from which duty was paid or if credit could be given in a single DEPB scrip that was still active. The Commissioner (Appeals) noted that the original authority had allowed credit on a single expired scrip instead of the relevant one, contrary to the circular instructions issued by the Board. The circular mandated re-crediting the amount on the relevant DEPB scrip where SAD was paid through DEPB scrip.

2. The secondary issue pertains to whether credit can be allowed on a live DEPB scrip or even on an expired one. A subsequent circular issued by the Board clarified that re-credited duty scrips issued by the Directorate General of Foreign Trade (DGFT) based on a consolidated certificate from Customs could be registered manually, allowing the utilization of the re-credited amount for payment of duty. This facility was extended as a one-time measure to address pending refund claims. The circular did not explicitly require credit to be allowed only on live scrips, indicating that credit could be permitted on expired DEPB scrips as well.

3. The Tribunal, considering the circular and the practical difficulties faced by parties in utilizing re-credited amounts, set aside the impugned order and remanded the matter to the original authority. The original authority was directed to allow re-credit on each DEPB scrip without verifying whether the scrip had expired or not. It was left to the importer to proceed to the DGFT to claim the credit and take further necessary actions as deemed appropriate. This decision aligned with the Board's indirect indication that credit could be allowed on both live and expired DEPB scrips, as evidenced by the manual filing of bills of entry for utilizing re-credited amounts.

In conclusion, the judgment clarified the procedure for allowing credit for SAD paid through DEPB scrips, emphasizing compliance with circular instructions and facilitating the utilization of re-credited amounts for duty payments, even on expired DEPB scrips.