The restriction against simultaneously availing Status Holder Incentive Scrips (SHIS) and Technology Upgradation Fund Scheme (TUFS) benefits applies only to the original exporter and not to a transferee license holder who purchases scrips from the market.

Dr. AJAYA KRISHNA VISHVESHA

This appeal is directed against the Order-in-Original dated 30.11.2016 passed by the learned Commissioner, Central Excise and Customs, Bharuch through which he confirmed the demand of Cenvat Credit wrongly availed Rs. 5,86,55,640/- and ordered to recover the amount from the appellants under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A (4) of the Central Excise Act, 1944 along with interest. He also imposed penalty of Rs. 5,86,55,640/- upon the appellant.

2. The facts of the case in brief are that the appellants are holding registration for the manufacture of excisable goods falling under Chapter 52 and 63 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant is availing the Cenvat Credit of capital goods under the Cenvat Credit Rules, 2004. During the course of CERA Audit, it was noticed by the Auditor from the records and information made available by the appellant that they had purchased ‘Status Holder Incentive Scrips’ (SHIS) from the market during the year 2013-14 and 2014-15 and utilized the ‘Scrips’ for debiting the duty on imported capital goods and simultaneously availed Cenvat Credit on the said capital goods. It was also noticed by CERA officers from the Balance Sheet made available by the appellant that they had availed benefit of Rs. 11.42 Crores under Technology Upgradation Fund Scheme (TUFS) of Ministry of Textile during the year 2013-14 and of Rs. 7.42 crores during the year 2014-15. In chapter 3 para 3.16 of Foreign Trade Policy 2009-14 , the Status Holders have been held entitled to incentive with certain conditions as mentioned in the policy document. As per the Notification No. 33/2012-CE dated 9th July, 2012, the Central Government exempted capital goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act 1985 when cleared against a ‘Status Holder Incentive Scheme Duty Credit Scrips’ issued to a Status Holder by the Regional Authority in accordance with paragraph 3.16 of the Foreign Trade Policy.

2.1 The appellant was requested vide letter dated 22.07.15 to reverse credit of Rs. 5.46 crores along with interest for the period 2012-13 to 2014-15, but, they vide letter dated 30.07.2015 replied that they are not agreeing with the objection raised by CERA. The Range officer vide letter dated 4th May, 2016 requested the appellant to provide information regarding availment and utilization of ‘Status Holder Incentive Scrips’ for the period 2011-12 to 2015-16 which the appellant provided vide letter dated 9th May, 2016 as per which,

they had availed and utilized Status Holder Incentive Script (SHIS) amounting to Rs. 5,86,55,640/-for the period from 2011-12 to 2015-16. However, the appellant has not availed benefit of ‘Status Holder Incentive Scrips’ during the period 2011-12 and 2012-13.

2.2 The department was of the view that the appellant has availed both the benefits / incentives namely Status Holder Incentive Scheme (SHIS) and Technology Upgradation Fund Scheme (TUFS) simultaneously in the same financial year, which is not correct as per Foreign Trade Policy, 2009-14 and Notification No. 33/2012-CE dated 09.07.2012. Therefore, the appellant has wrongly availed the benefit of SHIS and utilized the scrips for debiting the duty under licenses on imported capital goods and availed Cenvat credit on the said capital goods and the appellant did not bring to the notice of the department the availment of benefit of both the incentives SHIS and TUFS in the same year. The appellant never disclosed such information in periodical returns filed by them with the Range Office from time to time. The depa