Benefit of Cenvat credit cannot be Availed for Anyone Outside India: CESTAT [Read Order]

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the benefit of cenvat credit cannot be availed for anyone outside India.

The appellant imported ‘Muriate of Potash’ and claimed the aforesaid Central Excise exemption notifications which were conditional notifications. The condition therein is that no Cenvat credit should have been availed in the manufacture of the goods. It is the case of the revenue that the appellant has not manufactured but has imported these goods and hence it is impossible to verify whether any CENVAT credit has been availed or not and therefore no exemption notification is available to them.

It is the case of the appellant that the manufacturer of the product is located outside India and hence it is impossible for them to avail CENVAT credit. By no stretch of imagination, can it be alleged that CENVAT credit has been availed. Therefore, as far as imports are concerned, this condition is deemed to have been met.

The issue involved in the appeals is whether the appellant is entitled for the benefit of exemption notification 01/2011-CE or 02/2011-CE for the fertilizer viz., Muriate of Potash imported by them. When goods are imported into the country they are liable to (a) Basic Customs Duty as per the Customs Tariff read with any applicable exemption notifications; and (b) Additional Duty of Customs equivalent to Central Excise Duty leviable on similar products if manufactured in India read with any applicable exemption notifications.

A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “It is not in dispute that the goods have been imported and therefore were manufactured outside India. The CENVAT Credit Rules, 2004 or CENVAT Credit Rules, 2002 are framed under the Central Excise Act, 1944. This Act applies to the whole of India but not beyond. When the Central Excise Act itself does not extend outside India, neither will the CENVAT Credit Rules. Therefore, it is impossible for anyone outside India to avail the benefit of CENVAT credit. Therefore, in respect of imports, it is impossible that the condition of CENVAT credit not being availed is not fulfilled.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates