[Order per: A.K. JYOTISHI]

M/s Asian Peroxides Ltd (hereinafter referred to as the appellant) are in appeal against OIA dt.15.05.2013, whereby, the Commissioner (Appeals) has upheld the orders passed by the adjudicating authorities demanding duty and also imposing penalty (impugned order).

The brief facts of the case are that the appellants are engaged in manufacture of Hydrogen Peroxide and were also, inter alia, availing credit of Customs Duty, Counter Vailing Duty (CVD) and Special Additional Customs Duty paid on import of goods. The appellant availed Cenvat credit on Special Additional Duty (SAD) imposed under section 3(5) of Customs Tariff Act (CTA), 1975, which was adjusted against various licenses issued to them under DEPB schemes. The department felt that Notification No. 89/2005-Cus dt.04.10.2005 provided only for taking credit of duty paid as CVD equivalent to Central Excise Duty leviable under section 3(1) of CTA and not SAD adjusted against licenses. The department also relied on CBEC Circular No.20/2006-Cus dt.21.07.2006, which clarified that import made against DFEC under Notification No.51/2003-Cus dt.01.04.2003 applies also to the cases of import made against DEPB license and therefore, the exemption was limited to BCD and CVD only and hence Special CVD has to be paid in cash and no credit can be availed on the Special CVD by debiting DEPB scrips. Further, CBEC Circular No.59/2004 dt.21.10.2004 clarified that Additional Customs Duty paid through debit under DEPB shall be allowed only with respect to licenses issued under the new Foreign Trade Policy (FTP) and that the appellant had not been able to establish that DEPB scrips were issued under old policy or new policy.

Learned Advocate for the appellant has relied on various provisions under Import Export Policy 2002-07 (old policy) as well as Circular No.59/2004-Cus dt.21.10.2004 and various other circulars in support that they were entitled to take credit in respect of CVD and SAD paid by way of debiting the DEPB scrips. She has also contested that extended period of limitation is not invokable as they had disclosed everything about taking of credit in respect of SAD paid and that there was no requirement for them to mention whether the duties were paid in cash or otherwise. She has also relied on various judgments, inter alia, including judgment of jurisdictional High Court in the case of CCE, Hyderabad-IV Vs RCC Sales (P) Ltd [2012 (281) ELT 682 (AP)]. She has also submitted that extended period cannot be invoked as the issue is that of interpretation. She has also relied on various judgments in this regard as under.

a) CCE Vs MTZ Polyfilms Ltd [2010 (256) ELT 539 (Guj)]

b) UOI Vs Bharat Aluminium Co Ltd [2016 (344) ELT 1153 (Chhattisgarh)]

She has further submitted a statement showing that the licenses were issued in terms of prevailing policy starting from 04.09.2007 to 18.08.2008.

Learned AR, on the other hand, has reiterated the findings of the Commissioner (Appeals).

Heard both sides and perused the records.

We find that the core issue to be decided in this matter is whether the appellants could have taken credit in respect of CVD and SAD paid by way of debiting of DEPB scrips and not in cash or otherwise. The department has mostly relied on the provisions of Para 4.3.5 of Import Export Policy 2002- 07 (old policy), wherein, there is a provision that in case where the Additional Customs Duty is adjusted from DEPB, no benefit of Cenvat credit/ drawback shall be admissible. The department has also relied on Circular No.59/2004 dt.21.10.2004, which provided that Additional Customs Duty paid through debit under DEPB shall be allowed only with respect to licenses issued under new FTP. The department has also relied on CBEC Circular No.20/2006-Cus dt.21.07.2006, which clarified that Special CVD cannot be paid through the scrips issued under DFCE scheme. Learned Advocate has contested that the reliance of the department placed on the above circulars is no