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2015 (11) TMI 898 - AT - Central ExciseReversal of cenvat credit - duty debit was made in DEPB in respect of CVD paid by the appellant - adjustment of CVD paid in DEPB scrips under EXIM Policy 2002-07 - held that - period involved in the present appeal is July 2004 to September 2004 and during the relevant period of EXIM Policy 2002-2007 relevant para 4.35 of the policy was amended vide Notification No.28 RE-2004)/2002-2007 dt. 28.1.2004 where the restriction of DEPB as mentioned in last sentence of the paragraph has been deleted. Identical issue has already been settled by Hon ble High Court of Punjab & Haryana in the case of CCE Ludhiana Vs Neel Kanth Rubber Mills - 2010 (4) TMI 281 - PUNJAB & HARYANA HIGH COURT and the Hon ble High Court of Madras in the case of CCE Vs SPIC Ltd. - 2013 (9) TMI 93 - MADRAS HIGH COURT. wherein the Hon ble High Courts dismissed the Revenue s appeals. - during the relevant period of dispute para 4.3.5 of EXIM Policy was already amended w.e.f. 28.1.2004 and there was no restriction in availing cenvat credit on CVD paid by debit of DEPB. - appellants are eligible to avail credit on the CVD made in DEPB. Impugned order is set aside. - Decided in favour of assessee.
Issues:
Reversal of cenvat credit availed by the appellant due to duty debit in DEPB, eligibility of adjustment under EXIM Policy 2002-07, interpretation of relevant notifications and judicial precedents. Analysis: The main issue in the present appeal was the reversal of cenvat credit amounting to Rs. 18,88,501/- by the appellant, which was disallowed by the lower authorities. The disallowance was based on the grounds that the adjustment of CVD paid in DEPB scrips under the EXIM Policy 2002-07 was not eligible for credit due to restrictions outlined in exemption notifications. However, during the relevant period of July 2004 to September 2004, para 4.35 of the EXIM Policy 2002-07 was amended through Notification No.28(RE-2004)/2002-2007 dated 28.1.2004, removing the restriction related to DEPB. This crucial amendment allowed importers to avail cenvat credit against the amount debited in DEPB, as highlighted in judicial precedents. The appellant's case was supported by judicial precedents, specifically referring to the decisions of the Hon'ble High Court of Punjab & Haryana and the Hon'ble High Court of Madras. These courts had previously ruled in favor of importers being entitled to cenvat credit for CVD debited through DEPB accounts, even if the licenses were issued under the previous policy. The courts emphasized that once the relevant notifications were amended to extend the benefit of credit availment, the revenue authorities could not deny the appellant the right to cenvat credit, provided all other conditions were fulfilled. In contrast, the revenue authorities relied on the Larger Bench decision in the case of Essar Steels Ltd. Vs CCE Vizag, which was distinguished by the Hon'ble High Court of Madras. It was highlighted that during the disputed period, para 4.3.5 of the EXIM Policy had already been amended, removing any restrictions on availing cenvat credit for CVD paid by DEPB debit. Ultimately, the Tribunal, by following the judicial decisions and considering the amendments in the relevant policies, concluded that the appellants were indeed eligible to avail credit for CVD made in DEPB. Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed. In conclusion, the Tribunal's decision was based on a thorough analysis of the relevant legal provisions, amendments in the EXIM Policy, and judicial precedents, ultimately upholding the appellant's right to avail cenvat credit for CVD paid through DEPB, as per the amended notifications and court rulings.
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