2022 (11) TMI 597 - AT - Central Excise

CENVAT Credit - CVD plus cess - import of raw materials, where duty and cess have been paid by utilizing the DEPB scrips - HELD THAT - There is no disability in availing the credit, where CVD and Cess have been paid by utilizing DEPB scrips. Further, there is no dispute that the credit has been availed on the basis of bill of entry and certified copy of the same produced before the Range Authority. The appellant have rightly availed the cenvat credit. Accordingly, the appeal is allowed.

Summary

Issues involved:
1. Availment of cenvat credit on import of raw materials using DEPB scrips.
2. Disallowance of credit under Rule 14 of the CCR.
3. Appeal against the order-in-appeal dated 15.05.2018.

Issue 1: Availment of cenvat credit on import of raw materials using DEPB scrips:
The appellant had taken cenvat credit of CVD plus cess on the import of raw materials where duty and cess were paid by utilizing DEPB scrips. An audit objection was raised regarding the credit being taken against photocopies of the bill of entry, which were later replaced with certified copies. The show cause notice was issued more than 30 months after the objection, alleging that credit against 5 bills of entry paid through DEPB scrips should be disallowed under Rule 14 of the CCR. The order-in-original confirmed the demand and imposed a penalty. The Commissioner (Appeals) rejected the appeal, and the Revenue filed a cross-appeal, which was disposed of in favor of the Department. The Tribunal held that there is no disability in availing credit when CVD and Cess are paid using DEPB scrips, and since the credit was based on the bill of entry and certified copies were produced, the appellant rightly availed the cenvat credit. Consequently, the appeal was allowed, setting aside the impugned order.

Issue 2: Disallowance of credit under Rule 14 of the CCR:
The Revenue had filed a cross-appeal before the Commissioner (Appeals) arguing that the credit should have been disallowed under Rule 14 but was erroneously disallowed under Rule 15. The Commissioner (Appeals) upheld the order-in-original disallowing the credit under Rule 14. However, the Tribunal found no basis for disallowing the credit under Rule 14 as there was no prohibition on availing credit when duty is paid using DEPB scrips. The appellant's right to cenvat credit was upheld, and the impugned order was set aside, granting consequential benefits to the appellant.

Issue 3: Appeal against the order-in-appeal dated 15.05.2018:
Another appeal arising from the same order-in-original was filed by the appellant against the order-in-appeal dated 15.05.2018, which had rejected their appeal on the same issue. Since the Tribunal had already decided in favor of the appellant on the main issue, this appeal was also treated as allowed in favor of the appellant/assessee. Both appeals were allowed in favor of the appellant, providing a comprehensive resolution to the dispute.