Credit Of CVD Paid Through Debit In DEPB Scheme Is Admissible: CESTAT Allows Cenvat Credit To Hindustan Zinc

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the Cenvat Credit to Hindustan Zinc and held that credit of CVD paid through debit in the Duty Entitlement Passbook Script (DEPB) Scheme is admissible, and the bills of entry assessed by the customs authorities have not been bifurcated between CVD and Cess.

The bench of Ajay Sharma (Judicial Member) has observed that the Notification No. 89/2005-Cus dated October 4, 2005 specifically permits an importer to avail Cenvat Credit for additional duty levying under Section 3 of the Customs Tariff Act against the amount debited in the Duty Entitlement Passbook Script.

The issue raised was whether the appellants are entitled to use cenvat credit on account of Education Cess and SHE Cess paid through DEPB Scrips towards payment of central excise duty in terms of Rule 3(7)(b) of Cenvat Credit Rules, 2004.

The appellant contended that the assessed bills of entry have not bifurcated the amount of CES and duty. Thus, the total amount shown as CVD has been correctly redeemed as Cenvat credit.

The tribunal noted that, while assessing the bill of entry, the amount toward CVD and Cess has not been bifurcated by the customs authorities. Since the entire disputed amount was reflected under the ‘CVD’ heading in the Bill of Entry, the taking of Cenvat Credit of amount is in conformity with Rule 3 read with Rule 9 of the Cenvat Credit Rules.

Case Title: M/s. Hindustan Zinc Ltd. Versus Commissioner of Central Goods & Service Tax

Case No.: Excise Appeal No. 52263 of 2022

Date: 06.04.2023

Counsel For Appellant: Hemant Bajaj

Counsel For Respondent: Tamanna Alam

Click Here To Read/Download Order