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2020 (1) TMI 895 - AT - Central ExciseCenvat credit on the Special Additional Duty (SAD) - SAD paid by them by debiting under Target Plus scheme as per notification No.32/2005-CUS dt.08.04.2005 - HELD THAT - The jurisdictional High Court of Andhra Pradesh has, with respect to the very specific scheme, viz., Target Plus scheme in the case of COMMISSIONER OF CUS. C. EX., HYDERABAD-IV VERSUS RCC SALES (P) LTD. 2012 (10) TMI 452 - ANDHRA PRADESH HIGH COURT , held that Cenvat credit is available in respect of the SAD debited in Target Plus scheme. Credit allowed - appeal dismissed - decided against Revenue.
Issues:
1. Entitlement to Cenvat credit on Special Additional Duty (SAD) paid under Target Plus scheme. Analysis: The appeal before the Appellate Tribunal CESTAT Hyderabad involved the issue of whether the assessee/respondent was entitled to Cenvat credit on the SAD paid under the Target Plus scheme. The matter was originally decided ex-parte in favor of the Revenue, but the respondent filed a miscellaneous application seeking restoration of the appeal. The coordinate bench allowed the restoration, setting aside the final order and directing the appeal to be listed for final hearing. The primary issue was whether the Cenvat credit on the SAD paid under the Target Plus scheme was allowable, as proposed in the show cause notice and confirmed by the original authority. The first appellate authority had allowed the appeal, leading to the Revenue's appeal. The Tribunal had relied on previous judgments to disallow the Cenvat credit when amounts were debited under certain schemes. The Revenue's appeal was allowed based on these precedents. In response, the respondent's counsel argued that the specific scheme in question was the Target Plus scheme, distinct from the schemes discussed in the previous judgments. Referring to Circular No.18/2006-CUS, the counsel contended that the Board had clarified that Cenvat credit could be availed for the SAD debited under schemes like Target Plus. Additionally, reliance was placed on a judgment of the jurisdictional High Court of Andhra Pradesh, which held that Cenvat credit or drawback facility was available for amounts debited under the Target Plus scheme towards SAD of Customs. The counsel emphasized that the relevant notification allowed for Cenvat credit on additional duty leviable under section 3 of the Customs Tariff Act, including SAD. The argument was supported by the judgment of the jurisdictional High Court, leading to the request for rejection of the Revenue's appeal. After considering the arguments and reviewing the records, the Tribunal found merit in the respondent's contentions. The Tribunal noted that the jurisdictional High Court had specifically held that Cenvat credit was available for SAD debited under the Target Plus scheme. Therefore, the impugned order allowing the Cenvat credit was upheld, and the Revenue's appeal was rejected. The decision was based on the specific scheme in question and the interpretation of the relevant notification, allowing for Cenvat credit on the SAD paid under the Target Plus scheme. The Tribunal's decision was in line with the judgment of the jurisdictional High Court, leading to the rejection of the Revenue's appeal.
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