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2023 (3) TMI 1505 - AT - Central Excise100% EOU - Modvat credit admissible on the duty paid by an 100% EOU during the relevant period i.e. from January 1998 to March 2000 - argument of the Revenue is that both the authorities below have erred in allowing credit on the component of the Basic Customs Duty(BCD) and other duties of customs which are considered while computing the Excise duty payable by an 100% EOU while clearing their goods in DTA as per N/N. 2/95-CE dt. 04/01/1995. HELD THAT - The Revenue s argument is marred with confusion inasmuch as the goods manufactured by an 100% EOU and allowed to be sold in India, instead of export, the amount duty payable (50% of the applicable customs duties) has been prescribed under Notification No.2/95-CE dt. 4/1/1995; even though the nature of duty payable by an 100% EOU is excise duty, in computing the BCD and other duties as applicable are considered. This confusion has been addressed in detail by the Larger Bench of the Tribunal in the case of Vikram Ispat 2000 (8) TMI 111 - CEGAT, NEW DELHI where it was held that ' in agreement with the learned Advocates that the duty which is levied on the goods manufactured and cleared by 100% E.O.Us to the Domestic Tariff Area is a duty of Excise and not a duty of Customs on account of a measure being the Customs duty provided in proviso to Section 3(1) of the Central Excise Act.' The entitlement for MODVAT credit by the receiving manufacturing unit should always be less than the CVD payable on like articles imported into India. In the present case, the adjudicating authority has categorically through example referring to invoices observed that the additional duty on which the assessee has availed cenvat credit is less than the additional duty on import of like goods at the relevant point of time. Hence, there are no error in such finding warranting interference. There are no merit in the applications filed by the Revenue - appeal dismissed.
Issues Involved:
1. Jurisdiction of the Tribunal to review its own order. 2. Applicability of specific notifications (No. 177/86-CE, No. 5/94-CE(NT), and No. 21/99-CE(NT)) in determining the extent of CENVAT credit. 3. Timeliness and maintainability of the applications filed by the Revenue. 4. Interpretation of the duty payable by 100% EOU and the extent of modvat credit admissible. Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal to Review its Own Order: The respondent's advocate argued that the Tribunal lacks jurisdiction to review its own order as the power is not conferred on the Tribunal. The applications were also claimed to be barred by limitation. However, the Revenue contended that the applications were filed pursuant to the High Court's direction, which granted liberty to the Revenue to seek a review. The Tribunal noted that since neither side appealed against the High Court's order, it is binding, and thus, proceeded to hear the merits of the applications. 2. Applicability of Specific Notifications: The Tribunal's original order dated 14/02/2005 referred to Notification No. 5/94-CE(NT) while deciding the appeals in favor of the respondent. The Revenue argued that the Tribunal failed to consider Notifications No. 177/86-CE and No. 21/99-CE(NT), which restricted the credit to the additional duty leviable under Section 3 of the Customs Tariff Act, 1975. The Tribunal examined the relevant notifications and concluded that Notification No. 177/86-CE was superseded by Notification No. 5/94-CE(NT), which continued until Notification No. 21/99-CE(NT) was issued. The Tribunal found no substantial difference in the context and content of these notifications that would alter the principle of law laid down in the Vikram Ispat case. 3. Timeliness and Maintainability of the Applications: The respondent argued that the second set of applications filed by the Revenue was barred by limitation. However, the Revenue maintained that the applications were filed immediately after the High Court's direction and later pursuant to the Tribunal's observation. The Tribunal found the applications maintainable as they were filed in compliance with the High Court's order and the Tribunal's suggestion to proceed with the merits. 4. Interpretation of Duty Payable by 100% EOU and Extent of Modvat Credit Admissible: The core issue was whether the modvat credit admissible on the duty paid by a 100% EOU during the relevant period was correctly determined by the adjudicating authority and the first Appellate authority. The Tribunal, following the Vikram Ispat case, held that the entire amount of excise duty paid as per Notification No. 2/95-CE should be considered as additional duty (CVD) and not just one component. The Tribunal emphasized that the credit should be restricted to the additional duty leviable on like goods under Section 3 of the Customs Tariff Act, 1975. The Tribunal found that the adjudicating authority correctly observed that the additional duty on which the assessee availed cenvat credit was less than the additional duty on import of like goods, thus warranting no interference. Conclusion: The Tribunal dismissed the miscellaneous applications filed by the Revenue, agreeing with its earlier order dated 14/02/2005. The appeals were also dismissed, reaffirming the correctness of the modvat credit availed by the respondent as per the relevant notifications and the principle laid down in the Vikram Ispat case. The Tribunal's decision was pronounced in open court.
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