Appellant can avail cenvat credit of based on provisionally assessed bill of entry

Customs, Excise & Service Tax Appellate Tribunal

The Relevant Text of the Order as follows :

The brief facts of the present case are that the appellant have availed cenvat credit in respect of CVD paid on imported raw-material namely copper Concentrates based on provisionally assessed bills of entry. Since the value of the goods under Customs Act is based on copper Concentrate the bill of entry was initially provisionally assessed and on final assessment the value was determined on lower side, therefore, the duty paid on the basis of provisionally assessed bills of entry was found in excess as compared to the actual duty playable assessed finally. The case of the department is that the correct value of the goods is the value which was finally assessed, therefore, the respondent were not entitle for the cenvat credit paid in excess on the basis of provisionally assessed bills of entry . The department also contended that the amount of duty paid on the provisionally assessed bills of entry is deposit and not the duty actually payable as per the finally assessed bill of entry ,therefore, CVD paid as per provisionally assessed bill of entry is not admissible for cenvat credit to the appellant. The adjudicating authority dropped the proceeding of the show cause notice. Being aggrieved by the impugned order Revenue filed the present appeal.

2. Shri. Deepak kumar, Learned Special Counsel appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that the appellant availed the cenvat credit of CVD based on provisionally assessed bill of entry. Since the payment under provisionally assessed bills of entry is provisional, therefore, the same cannot be considered the same as duty but it is considered as deposit ,therefore, the appellant were entitle to cenvat credit only on the CVD amount which has been determined in the finally assessed bill of entry. The adjudicating authority has erred in dropping the proceeding.

3. On the first date that is on 21.06.2019 the matter was heard in detail when the respondent was represented by Shri. V. Shridharan, Learned senior Counsel along with Shri. Anand Nainawati and shri. Ishan Bhatt, advocates, however for some clarification the matter was relisted and it was finally heard on 06.11.2019.

Appellant can avail cenvat credit of based on provisionally assessed bill of entry

4. The respondent takes support of the adjudication order. They submits that the provisional assessment bill of entry is also with authority of law as provided that under Section 18 of the Customs Act, 1962, therefore, the duty paid at the time of provisional assessment of bill of entry cannot be said to be deposit but it is a payment of duty in terms of Section 18. For this reason the cenvat credit of CVD paid on provisional assessment is admissible. They alternatively submit that even if it is considered that the excess duty is not payable but since the same was paid the cenvat credit is admissible in terms of Rule 3 of Cenvat Credit Rules, 2004. He submits that the issue is squarely covered by the various judgments. They relied upon the following judgments:-

• Kesarwani Zarda Bhandar V. CCE, Thane-I-2016-TIOL-1348-CESTAT- MUM

• Sterlite Industries (I) LTD V. CCE, Tirunelveli-2011-TIOL-1463- CESTAT-MAD

• Nahar Granites Ltd V. CCE & ST, Ahmedabad Order No. A/10878/WZB/AHD/2013 dated 23.07.2013.

Affirmed by High Court of Gujarat at 2014 (305) ELT 9 (Guj.)

• MDS Switchgear Ltd. V. CCE, Aurangabad-2001 (132) ELT 405 (Tri. Mum)

Affirmed at 2008 ELT 485 (SC.)

5. We have heard both the sides and and perused the records. We find that the show cause notice proposed to deny the cenvat on the ground that the credit on the bill of entry can be taken only if it is finally assessed and credit cannot be taken on provisionally assessed bill of entry. The show cause notice also contended that the duty so paid on the basis of provisionally assessed bill of entry is not a duty but the same is deposit, therefore, the credit of such deposit is not admissible. We find that the provisional assessment is also provided under a statute i.e. under Section 18 of the Customs Act, 1962, therefore, the duty paid on the provisional assessment of bills of entry is also with authority of law. Therefore, it cannot be said that the payment made under provisionally assessed bills of entry is a deposit and not a duty. The provisionally assessed bills of entry is also valid document for availing the cenvat credit, for the reason that under Rule 9 of Cenvat Credit Rules only bill of entry is prescribed on the basis of which the payment of customs duty was made, therefore, bill of entry whether it is provisional of finally assessed, the Cenvat Credit is admissible. There is no bar in the law to restrict the Cenvat Credit on the CVD paid on the basis of provisionally assessed bills of entry. Therefore, merely because the Cenvat Credit was taken on provisionally assessed bills of entry, there is no reason to deny the Cenvat Credit. It is a settled law that even if any duty or excess duty paid which is otherwise not payable, and the recipient and Cenvat Credit cannot be disputed. On this issue the Tribunal has passed the various judgments which are reproduced below:

5.1 In the case of Kesarwani Zarda Bhandar(Supra) the Tribunal passed the following order paragraph-5.