2015 (10) TMI 2842 - AT - Central Excise

Calculation of CENVAT credit to be availed by a DTA unit in respect of inputs procured from 100% EOU - value of Basic Customs Duty (BCD) as leviable or what has exactly been paid by 100% EOU will be leviable. Revenue's objection is that the formula, as prescribed under the said Rule denotes the BCD actually paid by the 100% EOU and not the BCD leviable on like goods if imported into India. HELD THAT - The said issue stands decided by the Tribunal in the appellant's own case M/S. MICRO LABS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE 2015 (10) TMI 1788 - CESTAT BANGALORE wherein by taking note of a precedent decision in the case of SV. SALES CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE, SURAT 2013 (9) TMI 209 - CESTAT, AHMEDABAD it stands held that the BCD, mentioned in the said formula, refers to the BCD leviable on the like goods if imported into India. The impugned order set aside - appeal allowed.

Summary

Issues:
Interpretation of Rule 3(7)(a) of CENVAT Credit Rules, 2004 regarding availing CENVAT credit on inputs procured from 100% EOU.

Analysis:
The judgment by Archana Wadhwa, Member (J), of the Appellate Tribunal CESTAT Bangalore addressed the common issue in multiple appeals concerning the availing of CENVAT credit on inputs procured from a 100% EOU. The appellants had adopted a formula under Rule 3(7)(a) of the CENVAT Credit Rules, 2004 to calculate the credit, considering the Basic Customs Duty (BCD) as leviable, not the actual amount paid by the 100% EOU. The Revenue objected, stating that the formula should reflect the BCD actually paid by the EOU, not the BCD leviable on similar goods if imported into India.

The Tribunal, referring to a precedent decision in the case of S.V. Sales Corporation, held that the BCD mentioned in the formula pertains to the BCD leviable on similar goods if imported into India. This interpretation was consistent with previous Tribunal decisions. Therefore, based on the earlier rulings and the precedent, the impugned order was set aside, and all appeals were allowed in favor of the appellants. The judgment provided consequential relief to the appellants, resolving the issue in their favor.