Payment of CVD and Cess by utilizing DEPB scrips: CESTAT allows Cenvat Credit [Read Order]

A Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), New Delhi allowed cenvat credit on payment of Countervailing Duty (CVD) and Cess by utilizing Duty Entitlement Passbook Scheme (DEPB) scrips.

Audit objection was raised pursuant to Audit held in July-August, 2013 raising objection that with respect to 7 bills of entry that the credit has been taken against photocopies of the bill of entry. The appellant, M/s. Desmet Reagent Pvt Ltd thereafter, as original bills were mis-placed, obtained certified copies from the Customs House and filed such certified copies before the Range Superintendent.

Thereafter, after more than 30 months, show cause notice was issued alleging that with respect to 5 bills of entry, where the payment of CVD and Cess has been paid through DEPB scrips should not be disallowed under Rule 14 of the Cenvat Credit Rules (CCR). Further, penalty was also proposed.

Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), who rejected the appeal of the appellant and the Revenue also filed cross appeal before the Commissioner (Appeals) on the ground that the credit should have been disallowed under Rule 14 of the Cenvat Credit Rules (CCR) but due to clerical error, the amount has been disallowed under Rule 15 of the Cenvat Credit Rules (CCR).

The Commissioner (Appeals) disposed of the appeal of Revenue in favour of the Department modifying the to the effect that the amount is disallowed under Rule 14 of CCR. Being aggrieved, the appellant is before the Tribunal.

The issue involved in this appeal is whether the appellant have rightly taken cenvat credit of CVD plus cess on the import of raw materials, where duty and cess have been paid by utilizing the DEPB scrips.

A Single Bench consisting of Anil Choudhary, Judicial Member observed that “I find that there is no disability in availing the credit, where CVD and Cess have been paid by utilizing DEPB scrips. Further, there is no dispute that the credit has been availed on the basis of bill of entry and certified copy of the same produced before the Range Authority. In this view of the matter, I hold that the appellant has rightly availed the cenvat credit.”

To Read the full text of the Order CLICK HERE

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