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2024 (12) TMI 402 - AT - Central ExciseIrregular availment of Cenvat Credit of education cess and secondary and higher education cess on CVD which was debited from DEPB - It is the case of the Revenue that the exemption notification allow Cenvat Credit of CVD leviable under Section 3 of Custom Tariff Act but does not allow the credit of EC/SHEC on such CVD - HELD THAT - The said issue has been dealt by this Tribunal in the case of M/S. LASER SHAVING (I) P. LTD. VERSUS CCE, HYDERABAD 2016 (6) TMI 868 - CESTAT HYDERABAD wherein it was held that ' the contention of the appellants that Education Cess and Secondary Higher Education Cess payable on that part of CVD which is equal to the basic excise duty is a part of CVD itself is not without substance.' As issue is squarely covered by the decision of Laser Shaving (I) P. Ltd. (Supra) therefore, it is held that the Respondent is entitled to avail Cenvat Credit of additional duty quantified in respect of duty of Excise levied under different enactments is available is terms of Rule 3(7) of Cenvat Credit Rules, 2004 read with condition No. 6 of Notification No. 85/2005 Custom dated 4th October, 2005. As Rule 3(7) of the Cenvat Credit Rules specifically covers of CVD quantifies with respect to EC SHEC levied under Section 93 and Section 138 of the Finance Act, 2004 and Finance Act, 2007 respectively. Respondent has correctly taken the Cenvat Credit of Education Cess and Secondary Higher Education Cess on the imported goods in question. Therefore, there are no infirmity in the impugned order. The same is upheld and the appeal filed by the Revenue is dismissed.
Issues:
Whether the Respondent is entitled to avail Cenvat Credit of Education Cess/Secondary Higher Education Cess in terms of Rule 3 of Cenvat Credit Rules, 2004 which are part of additional duty levied under Section 3(1) of the Custom Tariff Act or not? Analysis: The case involved a dispute where the Respondent, engaged in the manufacturing of Purified Terephthalic Acid (PTA) under the Cenvat Scheme, availed Cenvat Credit of Education Cess (EC) and Secondary Higher Education Cess (SHEC) on raw materials imported by debiting from Duty Entitlement Pass Book (DEPB) scripts. The Revenue alleged irregularity in availing such credits, leading to the initiation of proceedings via a Show Cause Notice. The Adjudicating Authority initially dropped the proceedings, considering EC/SHEC as integral parts of CVD. The Revenue appealed, arguing that Rule 3 of Cenvat Credit Rules, 2004 does not allow credit of EC/SHEC on imported goods. The Tribunal analyzed a similar case precedent involving Laser Shaving (I) P. Ltd. and observed that the rate of CVD on imported goods includes Education Cess and SHEC. The Tribunal also referenced the case of Jumbo Bags Ltd., highlighting that credit on EC and SHEC is available under Rule 3(1) of the Cenvat Credit Rules for both imported and domestically produced goods. The Tribunal further cited cases where credits were allowed even when duties were paid by debiting DEPB. Ultimately, the Tribunal held that the Respondent was entitled to avail Cenvat Credit of EC and SHEC on imported goods under Rule 3(7) of the Cenvat Credit Rules, 2004, in line with Notification No. 85/2005 Customs. The impugned order was upheld, dismissing the Revenue's appeal and disposing of the Cross Objections filed by the Respondents. This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved, the arguments presented by both parties, the relevant legal provisions, and the Tribunal's reasoning in arriving at its decision.
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