Vignesh Alloys Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-in-Appeal No.121/2009 dated 30.9.2009 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore]

Vignesh Alloys Pvt. Ltd. Appellant

Versus

Commissioner of Central Excise, Coimbatore Respondent

Appearance:

Ms. D.Naveena, Advocate For the Appellant Shri M. Rammohan Rao, DC (AR) For the Respondent

CORAM:

Honble Shri R. Periasami, Technical Member

Date of hearing/decision :18.3.2015

FINAL ORDER No.40631/2015

The short issue in the present appeal relates to reversal of cenvat credit of Rs.18,88,501/- availed by the appellant where the duty debit was made in DEPB in respect of CVD paid by the appellant and availed credit. The lower authorities disallowed the credit on the ground that adjustment of CVD paid in DEPB scrips under EXIM Policy 2002-07 was not eligible to avail credit as per the restrictions read with exemption notifications.

2. After hearing both sides, I find that the period involved in the present appeal is July 2004 to September 2004 and during the relevant period of EXIM Policy 2002-2007 relevant para 4.35 of the policy was amended vide Notification No.28[RE-2004)/2002-2007 dt. 28.1.2004 where the restriction of DEPB as mentioned in last sentence of the paragraph has been deleted. Identical issue has already been settled by Hon'ble High Court of Punjab & Haryana in the case of CCE Ludhiana Vs Neel Kanth Rubber Mills - 2004 (254) ELT 203 (P&H) and the Hon'ble High Court of Madras in the case of CCE Vs SPIC Ltd.  2014 (305) ELT 484 (Mad). wherein the Hon'ble High Courts dismissed the Revenue's appeals. The relevant paragraphs 10 & 11 in the case of Punjab & Haryana High Court's order are reproduced as under :-

"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 in 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 17-9-2004, 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.

11.?It is not a matter of dispute that the assessee fulfills all other conditions to avail the Cenvat credit. Once the Notification has been amended on 17-9-2004 to extend the benefit of availment of credit of CVD debited through DEPB account, in that eventuality, the revenue cannot deny the benefit of Cenvat credit to the assessee, in the obtaining circumstances of the case. We are of the considered opinion that the Adjudicating Authority has rightly dropped the proceedings and refunded the amount of Cenvat credit to the assessee, vide order (Annexure A2/1), which was upheld by the Commissioner (Appeals) as well as the Appellate Tribunal."

3. Revenue relied on Larger Bench decision in the case of Essar Steels Ltd. Vs CCE Vizag  2004 (173) ELT 239 (Tri.-LB) which has been distinguished by the Hon'ble High Court of Madras. Further during the relevant period of dispute para 4.3.5 of EXIM Policy was already amended w.e.f. 28.1.2004 and there was no restriction in availing cenvat credit on CVD paid by debit of DEPB.

4. By respectfully following the judicial decisions (supra) , I hold that appellants are eligible to avail credit on the CVD made in DEPB. Impugned order is set aside. Appeal is allowed.

(Operative part of the order pronounced in open court on 18.3.2015)

(R. PERIASAMI) TECHNICAL MEMBER

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