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2016 (11) TMI 8 - AT - Central ExciseWhether the appellants are eligible for credit of Special Additional Duty (SAD) of Customs Education Cess and Secondary Higher Education Cess paid by the 100% EOU on the goods sent to the appellants - Held that - in the case of Zabatax Textiles India Pvt. Ltd. Vs. Commissioner of Central Excise & Service Tax Vapi 2016 (3) TMI 345 - For the purposes of arriving at the rate of duty it has been prescribed in the said section that the rate of excise duty on goods cleared from an EOU shall be the aggregate of the customs duties leviable on like goods imported into India. Nevertheless the levy is an excise levy and it does not in any way gets converted into a customs levy - Similarly in the case of imported goods the additional duty paid under sub-section (1) of Section 3 of the Customs Tariff Act as well as under sub-section (5) of the said section are duties specified for availment as credit under Rule 3 of the Cenvat Credit Rules - Appeal allowed.
Issues involved:
Whether the appellants are eligible for credit of Special Additional Duty (SAD) of Customs, Education Cess, and Secondary Higher Education Cess paid by the 100% EOU on the goods sent to the appellants. Analysis: The issue in this case revolved around the eligibility of the appellants for credit of Special Additional Duty (SAD) of Customs, Education Cess, and Secondary Higher Education Cess paid by the 100% EOU on the goods sent to the appellants. The Ld. Counsel for the appellants argued that the issue had already been settled in favor of the appellants based on previous Tribunal decisions, including the case of Zabatax Textiles India Pvt. Ltd. vs. Commissioner of Central Excise & Service Tax, Vapi. The Tribunal had previously held in the Zabatex Textiles India Pvt. Ltd. case that the matter was settled in favor of the appellants based on earlier Tribunal decisions. The Tribunal referred to the case of Metaclad Industries vs. CCE, Mumbai, and other relevant decisions to support the appellants' claim for credit. It was highlighted that the excise duty levied on goods cleared from a 100% EOU to DTA is considered an excise duty under Section 3 of the Central Excise Act. The Tribunal emphasized that the excise duty paid by an EOU, regardless of its components, is eligible for Cenvat credit under Rule 3 of the Cenvat Credit Rules, 2004. Additionally, the Tribunal clarified that the amendment made in the Rule in 2009 was for removing doubts and not for restricting credit eligibility. Therefore, the Revenue's contention to restrict credit was deemed unreasonable and rejected. Ultimately, the Tribunal ruled in favor of the appellants, allowing the appeal and confirming their eligibility for the credit of Special Additional Duty (SAD) of Customs, Education Cess, and Secondary Higher Education Cess paid by the 100% EOU on the goods sent to them. The decision was based on the understanding that the excise duty paid by the EOU is eligible for Cenvat credit under the relevant rules, regardless of the duty components.
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