2026-VIL-462-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Eligibility to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips – Appellant availed Cenvat credit on Special Additional Duty (SAD) imposed under section 3(5) of Customs Tariff Act, 1975, which was adjusted against various licenses issued to them under DEPB schemes - Department denied the credit, relying on various notifications and circulars which suggested that credit can only be availed if the duties are paid in cash, and not through adjustment against DEPB scrips - Whether the appellant was eligible to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips and not in cash – HELD - As per the provisions of EXIM policy 2004-09, Cenvat credit is admissible even if the Additional Customs Duty is paid by way of debit under DEPB - As per Para 4.3 of EXIM policy 2002-07, there was a provision that in case where the Additional Customs Duty is adjusted from DEPB, no benefit of Cenvat credit/ drawback shall be admissible. However, with an amendment on 28.01.2004, this provision was deleted from Para 4.3.5. Therefore, there is no such explicit restriction for not taking credit if the payment has not been made in cash in terms of prevailing EXIM policy for the period post amendment i.e., 28.01.2004 - The importer is eligible for credit on the duty paid by debit in DEPB, as the CCR do not provide that the duty must be paid only in cash. The relaxation regarding allowing credit on duties paid through DEPB was not limited to the amended EXIM policy post 28.01.2004, but was applicable even under the old policy - The appellant was eligible to avail Cenvat credit of CVD and SAD paid by debiting DEPB scrips – The impugned order is set aside and the appeal is allowed
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