2016 (8) TMI 977 - AT - Central Excise

Cenvat credit - CVD on strength of CVD foregone by debit in DEPB scrips - allowed only with issue of Notification No. 96/2004-CUS dated 17/09/2004 - Held that - the issue is no more res-integra and has been decided by Tribunal that the Appellant has not been to show any notification by which the benefit of CENVAT credit has been expressly denied where the payment of customs duty or additional customs duty is made using DEPB scrips issued in terms of the FTP 2002-07. - Decided in favour of appellant

Summary

Issues:
- Disallowance of CENVAT Credit on DEPB scrips issued under EXIM Policy 2002-2007
- Interpretation of Notification No. 96/2004-CUS
- Legal precedent regarding CENVAT Credit on DEPB scrips under different Foreign Trade Policies

Analysis:
The case involved the disallowance of CENVAT Credit on DEPB scrips issued under the EXIM Policy 2002-2007. The appellant, a manufacturer of Gang Saw Blades, imported raw materials and availed CENVAT Credit of CVD on the strength of CVD foregone by debit in DEPB scrips. The issue arose as the authorities disallowed the credit, citing Notification No. 96/2004-CUS and Circular No. 59/2004 CUS, which clarified that CENVAT Credit was available only for DEPB scrips issued under the new Foreign Trade Policy (EXIM Policy 2004-2009). The appellant's appeal was based on settled legal principles and cited the decision of the Hon'ble High Court of Delhi in a similar case, where CENVAT Credit was allowed for DEPB scrips issued under the earlier policy (FTP 2002-07).

The Tribunal considered the legal precedent and held that the benefit of CENVAT Credit could be availed for DEPB scrips issued under different Foreign Trade Policies. The Tribunal referred to a decision where it was established that there was no condition in the notifications that debits in DEPB issued under a previous FTP would not be eligible for credit. The Tribunal also noted that no appeal had been filed against the decision of the Punjab and Haryana High Court, which favored the Assessee and allowed the CENVAT Credit. The Tribunal found that the issue was no longer res-integra, and based on the legal precedent and lack of notification expressly denying the benefit of CENVAT credit, the appeal was allowed in favor of the appellant.

In conclusion, the Tribunal's decision was based on the interpretation of Notification No. 96/2004-CUS and the legal precedent established by the decisions of various High Courts. The judgment clarified that the benefit of CENVAT Credit could be availed for DEPB scrips issued under different Foreign Trade Policies, and in this case, the appellant was entitled to the credit despite the DEPB scrips being issued under the EXIM Policy 2002-2007.