By TIOL News Service

MUMBAI, OCT 18, 2016: THE issue is whether the appellant has correctly availed CENVAT credit of the CVD paid on the imported goods which were traded by them.

The facts are that the appellant had imported sinks and discharged appropriate customs duty and countervailing duty on the same and removed the same to their warehouse which is near to the factory. Subsequently, the sinks were checked, packed and labeled by them and cleared without payment of duty.

The Revenue authorities, on a visit, noticed the activity and instructed/directed the appellant that central excise duty is payable on the repacked goods as per the provisions of Section 2(f)(iii) of the CEA, 1944.

The appellant discharged appropriate central excise duty and subsequently took CENVAT credit of the CVD paid on the imported sinks.

Revenue is objecting to credit availment and since this stand was upheld by the Commissioner (A), the appellant is before the CESTAT.

After considering the submissions the Bench observed -

"4. …, I find that the appellant had discharged applicable/appropriate central excise duty on the sinks after packing/repacking them. This is evident from the letter dated 10.12.2003 (annexed at pages 12, 13 and 14 of the appeal memoranda) which indicates that the appellant has discharged the central excise duty on the imported sinks when they repacked and relabeled. It is settled law that when duty liability has been demanded and discharged, the inputs used for such goods if dutiable and duty has been discharged, the assessee is eligible to avail CENVAT credit of the same. Accordingly, I do not find any reason to reject the CENVAT credit of the CVD paid on the imported sinks…."

Holding that the issue is settled in the case of Sweet Confectionery - 2008-TIOL-1699-CESTAT-MUM, the CESTAT held that the appellant is eligible to avail CENVAT credit of the CVD paid on the imported sinks.

The impugned order was set aside and the appeal was allowed.

(See 2016-TIOL-2712-CESTAT-MUM)