2009 (7) TMI 295 - AT - Central Excise

Credit - Vide the impugned order Commissioner (Appeals) relying on decision of the Tribunal in the case of Polyhose India Pvt. Ltd. v. CCE - has held that the assessees/respondents are eligible to credit of additional duty on the strength of debits of duty amount in the DEPB passbook, even though no additional duty was actually paid in cash. - We find that the decision relied on by the lower appellate authority is no longer good law in the light of the subsequent decision of the Larger Bench of the Tribunal in Essar Steel Ltd. v. CCE - holding that mere debit in DEPB passbook is not sufficient for eligibility of MODVAT credit availed on the strength of Bill of Entry. Held that credit is not admissible - However, since at the relevant point of time there was a decision of the Tribunal namely the decision in Polyhose India (supra) holding that credit is admissible on the strength of debit notes for debiting in DEPB passbook we do not accept the prayer for imposition of penalty on the respondents. The Revenue s appeal is thus partly allowed.

Summary

The Commissioner (Appeals) allowed assessees to credit additional duty based on debits in DEPB passbook, but the Tribunal ruled credit not admissible without actual payment. The Revenue's appeal partly allowed, penalty not imposed. Assessee's cross-objection dismissed as comments on Revenue's appeal.