2016 (11) TMI 44 - AT - Central Excise

Whether the appellant has correctly availed the cenvat credit of the CVD paid on the imported goods which were traded by them - Held that - the appellant had discharged applicable/appropriate central excise duty on the sinks after packing/repacking them - It is settled law that when duty liability has been demanded and discharged, the inputs used for such goods if dutiable and duty has been discharged, the assessee is eligible to avail cenvat credit of the same - Appeal allowed.

Summary

Issues:
1. Correct availing of cenvat credit on imported goods
2. Applicability of central excise duty on repacked goods
3. Eligibility to avail cenvat credit of CVD paid on imported sinks

Analysis:
1. The main issue in this case is whether the appellant correctly availed the cenvat credit of the countervailing duty (CVD) paid on the imported goods they traded. The appellant imported sinks, paid customs duty and CVD, repacked the sinks, and removed them to their warehouse. The Revenue authorities later demanded central excise duty on the repacked goods. The appellant then paid the central excise duty and claimed cenvat credit of the CVD paid on the imported sinks when clearing the consignments.

2. Upon reviewing the case records, it was found that the appellant indeed discharged the central excise duty on the sinks after repacking them, as evidenced by a letter dated 10.12.2003. The law states that when duty liability is demanded and discharged, and the inputs used are dutiable and duty has been paid, the assessee is eligible to avail cenvat credit. The Tribunal's decisions in similar cases support this interpretation, such as DSM Anti-Infective India (P) Ltd. vs. CCE, Bharat Wagon & Engg. Co. Ltd. vs. CCE, and CCE, Pune-II vs. Sweet Confectionary.

3. Considering the duty liability was discharged on the final products after repacking, it was concluded that the appellant is entitled to avail the cenvat credit of the CVD paid on the imported sinks. Consequently, the impugned order was set aside, and the appeal was allowed.