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TMI Blog2012 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... duty levied on like articles produced in India. Under sub-section (5), another additional duty of customs is levied at a rate not exceeding four per cent of the value of the imported article so as to counterbalance the sales tax/value added tax or any other charges on a like article on its sale, purchase or transportation in India. Both the levies are “additional duty of customs” and therefore, there is no warrant to restrict the scope of the term additional duty of customs occurring in the formula to only the additional duty leviable under sub-section (1) of section 3 and not to the additional duty leviable under sub section (5) thereof - in favour of assessee. - E/1244 and 1247/12 - ORDER NO.S/280-281/12/SMB/C-IV, A/163-164/12/SMB/C-IV - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CENVAT Credit Rules, 2004 vide Clause (vii)(a) additional duty of customs leviable under sub-section (5) of the Section 3 of the Customs Tariff Act has been specified as a duty on which credit can be availed. In sub-rule (7) of the said Rule, in respect of excisable goods procured from a 100% EOU, a formula has been prescribed to arrive at the quantum of CENVAT credit that could be taken and in that formula it has been specified that the CVD mentioned therein refers to the additional duty of customs leviable on the inputs or capital goods, as the case may be. The expression used additional duty of customs does not restrict itself to the additional duty leviable under sub-section (1) of Section 3 of the Customs Tariff Act but also incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the narrow compass, I am of the view that the appeals themselves can be disposed of at this stage itself. Therefore, after dispensing with the requirement of pre-deposit of the dues adjudged, I have taken up the appeals for consideration. 5.1 The levy on the goods cleared from a 100% EOU to DTA is an excise duty as provided for in section 3 of the Central Excise Act. 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. Once this position in law is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid under sub-section (5) of section 3 in respect of imported goods, if that is denied in the case of goods procured from an EOU, it will be a dis-incentive for procurement from EOU. The object and purpose of levy of special additional duty under section 3(5) of the Customs Tariff Act was to provide a level playing field for domestic units. That objective will be completely negative, if the said duty is not available as credit for procurement from EOUs vis- -vis imports. The Cenvat Credit scheme is not intended to create distortions in the market place and the law also should not be interpreted in such a way so as to create a distortion. It is an accepted legal principle that the law should be interpreted in a harmonious way so as to sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus for the purposes of allowing the cenvat credit, both the additional duties have to be taken into account and restricting the benefit to only one additional duty is not warranted under the strict interpretation principle of statutory interpretation. Further, CENVAT is as beneficial provision for reducing the cascading effect of taxation and if the object of CENVAT has to be sub-served, the credit should be made available in respect of both the additional duty of customs. The economic rationale for the same has already been explained in the preceding paragraph. 5.4 The clarification / amendment made in the said Rule in 2009 is only for the purpose of removal of doubts and not for any other reason. Therefore, the revenue's contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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