2026-VIL-97-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Availment of CENVAT Credit by a 100% EOU on finished goods at the time of debonding – Appellant was a 100% EOU that obtained in-principle exit and finally debonded from the EOU scheme. At the time of debonding, the appellant paid central excise duty on its capital goods, finished goods (pig iron and slag), and inputs lying in stock. The appellant then availed CENVAT Credit on the duty paid on the finished goods, treating them as 'inputs' for the DTA unit - Whether the appellant was entitled to avail CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme – HELD - The appellant was entitled to avail CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme. The Revenue could not cite any specific provision in the CENVAT Credit Rules that disallowed such credit - Upon debonding, the finished goods and inputs become inputs in the DTA unit, and the appellant is entitled to avail CENVAT Credit on the duty paid on such goods at the time of debonding. Since the appellant had paid the appropriate duty on the finished goods at the time of debonding, it is entitled to avail the CENVAT Credit on the same - Further, demand raised by invoking the extended period of limitation is not valid, as the appellant had not suppressed any information from the Department, and the debonding and duty payment were within the knowledge of the Department - The appellant had rightly availed the CENVAT Credit on the duty paid on its own finished goods at the time of debonding from the EOU scheme – The appeal is allowed
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