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2025 (4) TMI 758 - AT - Central ExciseAvailment of cenvat credit of additional duty of customs (CVD) paid by debiting the Duty Entitlement Pass Book (DEPB) scrips during the period 2010-11 to 2011-12 - invocation of extended period of limitation - HELD THAT - Learned Commissioner in the impugned order has reasoned that the adjustment of additional customs duty (CVD) paid by way of debiting the DEPB scrips cannot be considered as additional customs duty (CVD) paid and further held that when there is no payment of additional customs duty the availment of credit on said CVD is irregular. There are no merit in the said reasoning of the learned Commissioner as it has been held by the Hon ble Madras High Court in the case of Tanfact Industries Ltd. 2009 (4) TMI 92 - MADRAS HIGH COURT later affirmed by the Hon ble Supreme Court in 2009 (10) TMI 892 - SC ORDER that the goods cleared under DEPB scheme cannot be treated as exempted goods but it be treated as duty paid goods. Further Board in its Circular No.18/2006-Cus dated 05.06.2006 clarified that 4% special CVD paid by debiting DEPB scrips is allowed to be taken as cenvat credit. Also the N/N. 97/2009-Cus dated 11.09.2009 specifically mentions that the importers are entitled to avail the drawback or cenvat credit of additional duty leviable under Section 3 of the Customs Tariff Act against the amount debited in the DEPB scrips. The Tribunal in the case of Styrenix Performance Materials Limited Vs. CCE ST Vadodara-II 2023 (5) TMI 384 - CESTAT AHMEDABAD after examining the issue at length held that cenvat credit cannot be denied when the additional duty of customs (CVD) was debited by utilising the DEPB scrip. Conclusion - i) The goods cleared under the DEPB scheme are duty-paid goods and cenvat credit is admissible for additional duty of customs paid via DEPB scrips. ii) The invocation of the extended period of limitation requires clear evidence of suppression of facts which is absent in this case. Appeal of Revenue dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal question for consideration was whether the assessee is entitled to avail cenvat credit of additional duty of customs (CVD) paid by debiting the Duty Entitlement Pass Book (DEPB) scrips during the period 2010-11 to 2011-12. Additionally, the Tribunal considered whether the invocation of the extended period of limitation for recovery of the said credit was justified. ISSUE-WISE DETAILED ANALYSIS Entitlement to Cenvat Credit on CVD Paid via DEPB Scrips Relevant Legal Framework and Precedents: The issue revolves around the interpretation of Rule 3 of the Cenvat Credit Rules, 2004, and relevant notifications, particularly Notification No.97/2009-Cus dated 11.09.2009. The Tribunal also considered precedents such as the judgments in Tanfac Industries Ltd. and Styrenix Performance Materials Ltd., which held that goods cleared under the DEPB scheme are not exempted goods but duty-paid goods. Court's Interpretation and Reasoning: The Tribunal disagreed with the Commissioner's reasoning that adjustment of CVD by debiting DEPB scrips cannot be considered as payment of duty. The Tribunal emphasized that the Madras High Court and the Supreme Court had clarified that goods cleared under the DEPB scheme are duty-paid goods. Furthermore, Circular No.18/2006-Cus and Notification No.97/2009-Cus explicitly allow for the availment of cenvat credit on additional duty of customs paid via DEPB scrips. Key Evidence and Findings: The Tribunal noted that the relevant notifications and circulars clearly permitted the availment of cenvat credit for the additional duty of customs paid by debiting DEPB scrips. The Tribunal found that the Commissioner's order did not align with these legal provisions and precedents. Application of Law to Facts: Applying the legal framework, the Tribunal concluded that the assessee was entitled to cenvat credit for the CVD paid by utilizing DEPB scrips. The Tribunal found that the Commissioner's denial of cenvat credit was contrary to the established legal position. Treatment of Competing Arguments: The Tribunal considered the Revenue's argument that the Commissioner's order was not reasoned and required remand. However, it found no merit in this argument, as the legal position was clear and did not require further deliberation. Conclusions: The Tribunal concluded that the denial of cenvat credit on CVD paid via DEPB scrips was unsustainable and set aside the Commissioner's order. The Tribunal also rejected the Revenue's appeal for remand. Invocation of Extended Period of Limitation Relevant Legal Framework and Precedents: The invocation of the extended period of limitation is governed by the principles of suppression of facts, as outlined in the Central Excise Act and related jurisprudence. Court's Interpretation and Reasoning: The Tribunal noted the assessee's submission that there was no suppression of facts and, therefore, the extended period of limitation was unwarranted. The Tribunal did not find any evidence of suppression that would justify the extended period. Key Evidence and Findings: The Tribunal found no evidence to support the invocation of the extended period of limitation, as the assessee had not suppressed any material facts from the Department. Application of Law to Facts: The Tribunal applied the legal principles governing the extended period of limitation and found that the conditions for its invocation were not met in this case. Conclusions: The Tribunal concluded that the invocation of the extended period of limitation was unjustified and unsustainable. SIGNIFICANT HOLDINGS Core Principles Established: The Tribunal reaffirmed the principle that goods cleared under the DEPB scheme are duty-paid goods, and cenvat credit is admissible for additional duty of customs paid via DEPB scrips. The Tribunal also emphasized that the invocation of the extended period of limitation requires clear evidence of suppression of facts, which was absent in this case. Final Determinations on Each Issue: The Tribunal set aside the Commissioner's order denying cenvat credit on CVD paid via DEPB scrips and rejected the Revenue's appeal for remand. The Tribunal allowed the assessee's appeal, confirming their entitlement to cenvat credit and ruling against the invocation of the extended period of limitation.
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