M/S. Havells India Ltd vs Cce, New Delhi

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI

Date of Hearing/decision:16.01.2015

Appeals Nos. E/57175 & 57178/2013

[Arising out of Order-in-Appeal No.LTU/CE/Appeal/17/2013 in respect of Appeal No. E/57175/2013 and Order-in-Appeal No.LTU/CE/Appeal/18/2003 dated 28.02.2013 passed by the Commissioner of Central Excise (Appeals), New Delhi].

M/s. Havells India Ltd. Appellant

Vs.

CCE, New Delhi Respondent

For approval and signature:

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Appearance: Rep. by Shri J.P. Kaushik, Advocate for the appellant.

Rep. by Shri Pramod Kumar, DR for the respondent.

Coram: Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial).

Final Orders Nos.50237-50238/2015 /Dated:16.01.2015

Per Rakesh Kumar:

The appellants are manufacturers of MCB chargeable to central excise duty. The period of dispute in Appeal No.E/57175 of 2013 is from 23.12.2005 to 7.1.2006 and the period of dispute in Appeal No.E/57178 of 2013 is from 22.2.2004 to 29.4.2005. During this period, except for one bill of entry, in all other cases, the appellant imported raw materials by availing exemption under notification no.96/2004-Cus dated 17.09.2004 under which they paid the customs duty including Additional Customs Duty through DEPB scrips issued in terms of 2002-2007 Foreign Trade Policy. They took cenvat credit of the Additional Customs Duty paid through DEPB Scrips. Notification No.96/2004-Cus provided that an importer importing the goods against the DEPB Scrips issued in terms of 2004-2009 Foreign Trade Policy would be entitled to avail draw back or cenvat credit of the additional custom duty leviable under Section 3 of the Customs Tariff Act against the amount debited in the said DEPB scrip. The Department being of the view that since the Additional Customs Duty had been paid against the DEPB scrips issued under 2002-2007 Foreign Trade Policy, while the benefit of the cenvat credit in terms of the notification no.96/2004-Cus would be available only when the import had been made against DEPB scrips issued in terms of 2004-2009 Foreign Trade Policy, the appellant would not be eligible for cenvat credit. In one case the import was made during the period prior to 17.1.2004 by availing the exemption under notification no.34/97-Cus against DEPB scrips and in respect of that import also, the department was of the view that the cenvat credit of additional customs duty paid through DEPB scrips would not be admissible. It is on this basis that the Asstt. Commissioner/Joint commissioner by two separate orders confirmed the cenvat credit demands of Rs.3,27,959/- and Rs.12,37,579/- against the appellant along with interest under Section 11 AB and imposed penalty of equal amount. The orders passed by the Asstt. Commissioner/Joint Commissioner were upheld by the Commissioner (Appeals) by two separate orders against which these two appeals have been filed.

2. Heard both the sides.

3. Shri J.P. Kaushik, Advocate, ld. Counsel for the appellant, pleaded that in so far as the imports made against one bill of entry under notification no.34/97-CE during the period prior to 17.09.2004 where the customs duty including additional customs duty had been paid through DEPB scrips, the cenvt credit would be admissible, that in this regard, he relies upon the Tribunals Final Order No.50852/2014 dated 27.2.2014 in the Appellants own case, that as regards the imports made by availing exemption notification no.96/2004-Cus dated 17.09.2004 where the customs duty including the additional customs duty had been paid through DEPB scrips issued under 2002-2007 Foreign Trade Policy, the question of admissibility of cenvat credit stands decided in the appellants favour by the judgement of the Honble Punjab & Haryana High Court in the case of CCE, Ludhiana Vs. M/s.Neel Kanth Rubber Mills Village  CEA No.37 of 2010 and in this regard, he pointed out to para-10 of the judgement, which specifically deals with this issue. He accordingly pleaded that in view of the judgement of the Honble Punjab & Haryana High Court in the case mentioned above and also the Tribunals final order dated 27.2.2014 in the appellants own case, the impugned orders are not correct.

4. Shri Pramod Kumar, ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals).

5. We have considered the submissions from both the sides and perused the records.

6. So far as the cenvat credit of Additional Customs duty paid through DEPB scrips issued under 2002-2007 Foreign Trade Policy in respect of the imports made under notification no.96/2004-Cus is concerned, the only objection of the department is that while in terms of notification no.96/2004-CE, the benefit of the cenvat credit of additional customs duty paid through DEPB scrips would be admissible only if DEPB scrips had been issued in terms of 2004-2009 Foreign Trade Policy, while in this case, the duty had been paid through DEPB scrips in terms of 2002-2007 Foreign Trade Policy. However, we find that this very issue stands decided in the appellants favour by the judgement of the Honble Punjab & Haryana High Court in the case of Neel Kanth Rubber Mills (supra). Para-10 of this judgement specifically dealing with this issue is reproduced below:-

10. The main argument of the learned counsel for the revenue that since the licence in the present case was issued under the previous policy and during that period, the cenvat credit was not admissible if CVD paid, otherwise than in cash, so, the assessee is not entitled to avail the cenvat credit, is not only devoid of merit but misplaced as well, because the EXIM Policy amended, vide notification dated 28.1.2004 and notification no.96 dated 17.09.2004, postulate that an importer shall be entitled to avail the cenvat credit of additional duty leviable under Section 3 of the Act against the amount debited in DEPB. There is no such condition in the indicated notifications that the debits made, in DEPB, the licenses issued under the Foreign Trade Policy only would be eligible for credit and the debits made in DEPB issued under the previous policy will not be eligible for credit. It means the assessee was entitled to claim the benefit in this relevant connection.

7. As regards the cenvat credit of Additional Customs Duty paid through DEPB scrips in respect of the imports made under notification no.34/97-Cus, this issue also stands decided in favour of the appellants own case for the previous period by the Final Order passed by the Tribunal being no.50852/2014 dated 27.2.2014, which is reproduced below:-

After hearing both the sides, duly represented by Shri J.P. Kaushik, ld. Advocate for the appellants and Shri R.K. Mishra, ld. Departmental Representative for Revenue, I find that the short issue involved in the present appeal is as to whether the appellants, who have paid the Additional Custom Duty through DEPB are entitled to avail the CENVAT credit of the same or not. By adjudicating, a show cause notice dated 29.12.2005, for the period July, 2004 to September, 2004 and by relying upon the decision of the Larger Bench of the Tribunal in the case of ESSAR Steel Ltd. Vs. CCE, Visakhapatnam[ 2004 (173) ELT 239 (LB)], the lower authorities have held that in as much as CVD was not paid in cash but was debited in the DEPB passbook, the assessee cannot avail the credit of the said CVD paid.

2. I find that the said decision of the Larger Bench in the case of ESSAR Steel Ltd.,(supra) stands considered by Honble High Court of Madras and vide their order dated 19.07.2003 passed in the case of CCE, Chennai Vs. SPIC Ltd., it does not stand concurred with. It stands held by the Honble High Court that even when the duty stands paid under DEPB pass book entries, the assessee was eligible to claim the credit of the same.

3. In view of the above, I set aside the impugned order of the lower authorities on merits without considering the appellants claim on limitation. Appeal is thus allowed in the above terms.

8. In view of the above discussion, the impugned orders are not sustainable. The same are set aside. The appeals are allowed.

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

Ckp.

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