Custom, Excise & Service Tax Tribunal
M/S Banco Products (India) Ltd vs Commissioner Of Central Excise, ... on 7 February, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench at Ahmedabad ~~~~~ Appeal No.: E/847/2012-DB (Arising out of Order-in-Original No. 02/DEM/CEX/COMMR(A)/BRC-I/12 dated 12.9.2012 passed by Commissioner of Central Excise & Customs, Vadodara) M/s Banco products (India) Ltd. : Appellant (s) Versus Commissioner of Central Excise, Vadodara : Respondent (s)
Represented by:
For Appellant (s) : Shri Shailesh Vyas, Advocate For Respondent (s): Shri Sameer Chitkara, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing/Decision : 07.02.2018 Order No. A/10302/2018 Per: Raju This appeal has been filed by M/s Banco Product (I) Ltd. against denial of CENVAT Credit on a part of the duty paid on the inputs received from a 100% EOU.
2. Learned Counsel for the appellant argued that they are receiving Aluminium Tube and Core from 100% EOU and as per Rule 3(7) of the CENVAT Credit Rules, 2004, the credit in respect of input or capital goods procured from 100% EOU is restricted in the manner prescribed therein. The formula is as under: -
Fifty percent. of [X multiplied by (1+BCD/100) multiplied by (CVD/100), where BCD and CVD denotes of ad valorem rates, in percent, of basic customs duty and additional duty of customs leviable on the inputs or the capital goods respectively and X denotes the assessable value He pointed out that the Revenue seeks to exclude the SAD paid on the said goods from the calculation of credit available to them. Learned Counsel relied on the decision of the Tribunal in the case of METACLAD Industries Vs. Commissioner of Central Excise, Mumbai-III 2013 (289) ELT 381 (Tri-Mum), where in identical circumstances, the benefit has been allowed.
3. Learned AR relies on the impugned order.
4. We have gone through the rival submissions. We find that Rule 3(7) of the CENVAT Credit Rules prescribes that in respect of goods received from the 100% EOU, the credit can be availed in the manner prescribed as follows: -
Fifty percent. of [X multiplied by (1+BCD/100) multiplied by (CVD/100), where BCD and CVD denotes of ad valorem rates, in percent, of basic customs duty and additional duty of customs leviable on the inputs or the capital goods respectively and X denotes the assessable value 4.1 The Tribunal in the case of METACLAD Industries (supra) has observed as follows: -
5.3 Now coming to? the legal aspect, the expression used in sub-rule (7) of Rule 3 of the Cenvat Credit Rules is as follows :-
Fifty percent. of [X multiplied by (1+BCD/100) multiplied by (CVD/100), where BCD and CVD denotes of ad valorem rates, in percent, of basic customs duty and additional duty of customs leviable on the inputs or the capital goods respectively and X denotes the assessable value The expression additional duty of customs leviable is not qualified by any other term. Now there are two additional duties of customs leviable under Section 3 of the Customs Tariff Act under sub-section (1), an additional duty of customs is levied which is equal to the excise duty levied on like articles produced in India. Under sub-section (5), another additional duty of customs is levied at a rate not exceeding four per cent. of the value of the imported articles so as to counterbalance the sales tax/value added tax or any other charges on a like articles on its sale, purchase or transportation in India. Both the levies are additional duty of customs and therefore, there is no warrant to restrict the scope of the term additional duty of customs occurring in the formula mentioned above to only the additional duty leviable under sub-section (1) of Section 3 and not to the additional duty leviable under sub-section (5) thereof. As provided for in the General Clauses Act, in law, a reference to a singular terms also includes a reference to the plural. Thus for the purpose of allowing the Cenvat credit, both the additional duties have to be taken into account and restricting the benefit to only one additional duty is not warranted under the strict interpretation principle of statutory interpretation. Further, CENVAT is as beneficial provision for reducing the cascading effect of taxation and if the object of CENVAT has to be sub-served, the credit should be made available in respect of both the additional duty of customs. The economic rationale for the same has already been explained in the preceding paragraph.
5.4 The clarification/amendment made in the said Rule in 2009 is only for the purpose of removal of doubts and not for any other reason. Therefore, the Revenues contention for restricting the credit has no rationale at all and has to be rejected outright.
5. We find that the issue is identical and squarely covered by the said decision. In these circumstances, the appeal is allowed.
(Operative portion of the order pronounced in the Court)
(D. M. Misra) (Raju)
Member (Judicial) Member (Technical)
Sinha
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Appeal No. E/847/12