COMMISSIONER OF CUSTOMS Vs. JUBILANT ORGANOSYS LTD

JUDGEMENT

(1.) Revenue had preferred this Appeal on the question of law as formulated in para.4 of the Appeal Memo. At the hearing of this Appeal learned Counsel, however, has submitted the reframed question which reads as under:

(2.) The Respondents had filed Bill of Entry No.70 dated 6th August, 2004 for warehousing of the imported goods. The warehouse Bill of Entry was provisionally assessed and 70% of the goods were allowed to be cleared pending receipt of the test report. The Respondents filed exbonded bill of entry for clearance of 70% of the goods for home consumption which were also provisionally assessed pending test report of the Deputy Chief Officer. The Respondents on execution of provisional duty bond cleared 70% of the imported goods on payment of applicable duty. For the purpose of payment of duty the respondent tendered DEPB License and debited the credits available in DEPBs for payment of custom duties. According to the respondents Custom Notification No.45/02-Cus governs import of goods against DEPBs. Relying on the decision of the Tribunal in the case of Polyhouse Pvt. Ltd. - 2003 (152) ELT 361 and SPIC Ltd. - 2004 (61) RLT 671, the respondents bonafidely believed, that CVD paid through DEPB credit can be taken as cenvat credit and accordingly paid CVD on the imported goods by utilizing the DEPB credit. It appears that a larger Bench of the Tribunal in Essar Steels Ltd. vs. CCE - 2004 (173) ELT 239 held that CVD paid through DEPB credit cannot be availed as Cenvat Credit. The Larger Bench did not agree with the view expressed in the decision earlier referred to and overruled the same. The Respondents came to know of this judgment subsequently. The Respondents also came to know of the amendment made to the DEPB Scheme by the Foreign Trade Policy 31st August, 2004 permitting the assessee to avail CVD paid through DEPB. On realising the legal position the respondent requested the Custom Department by letter dated 29th October, 2004 to permit them to pay CVD in cash along with interest and permit re-credit of the DEPB. According to the respondent they pointed out in the said letter that since the assessment was provisional they should be permitted to pay CVD in cash. The Respondents relied on the decision of the Tribunal in Grasim Industries Ltd., 2002 (149) ELT 764.

(3.) The Assistant Commissioner of Customs passed his order on 28th June, 2005 holding that there is no provision in the Customs Act, 1962 for changing the mode of payment of CVD and accordingly rejected the permission sought by the Respondents to pay the CVD in cash and re-credit of the DEPB. Aggrieved by that order the respondents preferred an Appeal before the Commissioner of Customs (Appeals), Mumbai. That Appeal was dismissed by order dated 31st October, 2005 (30-9-2005). The Commissioner (Appeals) noted that the Respondents prayer was to allow to pay CVD and cash to avail CENVAT credit after provisional assessment is over. The learned Appellate Authority held that as per the Export/Import Policy 2002-07, para.4.35 prevailing on the date of Bill of Lading in the instant case, CVD debited under DEPB is not cenvatable. The learned Commissioner also held that he was of the opinion that the issue of CENVAT once a Bill of Entry is provisionally assessed is binding and does not fall back again with the purview and jurisdiction of the customs department. Hence held that demand of ex-bond duty by cash or debit in DEPB on final assessment is justified and consequently upheld the order of the Lower Authority and rejected the Appeal.