2012 (10) TMI 727 - AT - Central Excise

CENVAT credit Held that - Respondent has claimed the benefit of CENVAT credit of SAD on the strength of para 6 of Circular No. 27/2006-Cus., dated 13-10-2006 wherein it was clarified that customs duty paid in cash or through debit in certificate issued under DFCE/Target Plus Scheme could be availed as CENVAT credit or duty drawback cenvat credit allowed

Summary

Issues:
1. Stay of operation of impugned order allowing CENVAT credit of Special Additional Duty (SAD) paid on imported goods.
2. Imposition of penalty on the respondent.
3. Interpretation of Notification No. 32/2005-Cus. and Notification No. 19/2006-Cus. regarding availment of CENVAT credit of SAD.
4. Prima facie case for granting stay.

Analysis:

Issue 1:
The Department sought a stay on the impugned order allowing the respondent to take CENVAT credit of Special Additional Duty (SAD) paid on imported goods using DEPB credit. The Department contended that no penalty ground was raised in the appeal, and all grounds related to the substantive issue. The Judge considered Circulars and Notifications cited by the Department but found no valid point in favor of the appellant.

Issue 2:
The lower authority had imposed a penalty on the respondent, which was set aside by the Ld. Commissioner (Appeals). However, in the present appeal, no specific ground for imposing a penalty on the respondent was raised. The focus was on the substantive issue of CENVAT credit of SAD.

Issue 3:
The respondent claimed the benefit of CENVAT credit of SAD based on Circular No. 27/2006-Cus., which allowed customs duty paid through debit in certificates to be availed as CENVAT credit. The respondent relied on Notification No. 32/2005-Cus., which entitled importers to avail CENVAT credit of additional duty paid under Section 3 of the Customs Tariff Act. The introduction of SAD under Notification No. 19/2006-Cus. did not exclude SAD from the purview of Notification No. 32/2005-Cus.

Issue 4:
The appellant failed to establish a prima facie case for granting a stay on the impugned order. As a result, the application for stay was rejected, indicating that the Department did not present sufficient evidence to warrant a stay.

In conclusion, the judgment focused on the interpretation of relevant notifications and circulars regarding the availment of CENVAT credit of Special Additional Duty (SAD) paid on imported goods. The decision was made based on the lack of a prima facie case presented by the Department, leading to the rejection of their application for a stay on the impugned order.