Page 226 - ELT_1st August 2020_Vol 373_Part 3

408 EXCISE LAW TIMES [ Vol. 373

The above judgments was upheld by the Hon’ble Supreme Court reported at
Commissioner of Central Excise and Customs v. MDS Switchgear Ltd., 2008 (229)
E.L.T. 485 (S.C.).
1 5.6 In view of the above judgments, it is settled that even though cer-
tain amount of Excise duty/Service Tax not payable as per law but the manufac-
turer/service provider paid the duty/service tax, at the recipient and Cenvat
Credit cannot be denied only on the ground that the same was not payable by
the Manufacturer/Service provider. On the same analogy in the present case also
even though as per the final assessment there was excess payment of CVD which
was otherwise not payable, the Cenvat Credit on the said excess paid CVD can-
not be denied. The adjudicating authority has given a detailed finding. After
considering all the legal provisions on the issue in hand which is reproduced be-
low :-
14. DISCUSSION AND FINDINGS :
14.1 I have carefully gone through the show cause notice and defence
submissions made by the assessee at time of personal hearing.
14.2 It is alleged in the show cause notice that the assessee is importing
raw material, i.e. Copper Concentrate (CTH-2603 00 00) and filing bill of
Entry in the Custom House, Dahej. The Customs duty is levied on copper
concentrates on ad valorem basis i.e. based on the value determined in terms
of Section 14 of the Customs Act, 1962 read with Customs Valuation Rules,
2007. The Bills of entries are assessed provisionally for the reasons :-
1. Price of London Metal Exchange
2. Percentage of Copper
and later on finally assessed under Section 18(2)(a) of the Customs Act,
1962.
Further after final assessment of the Bills of Entry the assessee is filing
refund of one component of Bills of Entry. i.e. Basic Customs Duty, Ed. Cess
on Customs duty and HS Ed. Cess of Customs Duty and not for the other
component of Bills of Entry i.e. Countervailing Duty (CVD) and Special
Additional Duty (SAD). The balance of CVD and SAD is adjusted in the
Cenvat Credit of the same and the assessee had taken Cenvat Credit of
GVD and SAD on the basis of provisionally assessed Bills of Entry.
It is also alleged in the show cause notice that in terms of Rule 3(1) of
the Cenvat Credit Rules, 2004 a manufacturer or a producer of a final prod-
uct shall be allowed to take credit of specified duties, which have been
specified in the Rule 3(1) (i) to (viia) of Cenvat Credit Rule, 2004. That Cus-
toms duty means duty levied on imported items/exported items and is
based generally on the value of goods or upon the weight, dimensions, or
some other criteria of the items. Therefore the duty i.e. CAD and SVD paid
on provisionally assessed Bill of Entry cannot be termed as duty. In the
MCM dated 30-6-2014, it has been decided that any amount paid to the
government, which is not nature in duty, is treated as “Deposit’.
14.3 The assessee has contended that copper concentrate typically contain
copper along with impurities like Iron, Sulphur, Gold and Silver. The. per-
centage content of Copper in the imported copper concentrate is not known
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1 Paragraph number as per official text.
EXCISE LAW TIMES  1st August 2020  226