9911796707
TMI Blog2012 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... cured from a 100% EOU. The said duty comprises of various components such as Basic Customs duty, Additional Customs Duty leviable under sub-section (1) and sub-section (5) of Section 3 of Customs Tariff Act, 1975, Education Cess and so on. The department was of the view that the appellant is not entitled to take CENVAT credit of the portion relating to Special Additional Duty of Customs leviable under sub-section (5) of the Section 3 of the Customs Tariff Act, 1975 and, accordingly, they denied the cenvat credit and confirmed a demand of Rs.4,09,379/- against the appellant. Apart from imposing a penalty of an equivalent amount on the main appellant, a penalty of Rs.25,000/- was imposed on the co-appellant Shri Suketu Vasant Jariwala, a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld apply to the previous period also. She relies on the decision of this Tribunal in the case of Sri Venkateshwara Precision - 2010 (258) ELT 553 (T), Cello Plasto Tech and Emcure Pharmaceuticals Ltd. - 2008 (225) ELT 513 (Tri.) in support of her contention that they are rightly entitled for the CENVAT credit. 4. The learned Dy. Commissioner (A.R.) representing the Revenue on the other hand strongly opposes the contention. He submits that Notification No.22/2009-CE (N.T.) dated 7.9.2009 clarified the scope of the term CVD. The said benefit would be available only for the period on or after 7.9.2009 and in the instant case the period is prior to 7.9.2009. Therefore, the appellant are not entitled for the CENVAT credit of the excise duty pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of the nature of the components of duty which is contained in the excise duty paid by an EOU, credit should be available under Rule 3 of the CENVAT Credit Rules, 2004. 5.2 There are two reasons for allowing such credit. One is economic and the other is legal. First the economic reason Cenvat (value added tax) is an economic concept and the object is to minimize / eliminate the cascading effect of taxes. If this objection has to be realized, then full credit of the duties paid at the previous stage has to be allowed. Further, if credit of the entire excise duty paid by an EOU is not allowed and the same is restricted, it creates discrimination, between units in the DTA and units in the EOU Zone. That is to say, it will no longer be econ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms leviable is not qualified by any other term. Now there are two additional duties of customs leviable under Section 3 of the Customs Tariff Act. Under sub-section (1), an additional duty of customs is levied which is equal to the excise 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 me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al duty of customs and it does not differentiate between the two additional duties. The Revenue has not been able to place before me any contrary decision in support of their argument that the additional duty paid under sub-section (5) of Section 3 is not available as cenvat credit. Therefore, the ratio of the decisions relied upon by the appellants, is squarely applicable to the facts of present case.
6. In the light of these discussions, I hold that the appellant are rightly entitled for the credit of all the additional duties of customs paid by the EOU under section 3 of the Customs Tariff Act even for the period prior to 7.9.2009. Thus I allow the appeals with consequential relief. The stay applications are also disposed of. X X X X Extracts X X X X X X X X Extracts X X X X
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