The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no Cenvat credit can be granted where the disputed amount paid by the importer was not towards Countervailing Duty (CVD) under the Advance Licence Scheme.
The bench of Dr. Ajaya Krishna Vishvesha (Member Judicial) and Satendra Vikram Singh (Member Technical) passed the final order on May 5, 2026 while dismissing an appeal challenging denial of Cenvat credit amounting to ₹70.67 lakh.
The dispute arose from imports of inputs and capital goods made under multiple advance licences issued during 1995–1999. The importer had failed to fulfil export obligations within the prescribed period and thereafter approached the Settlement Commission for settlement of customs duty liability.
The Settlement Commission determined the customs duty liability at ₹1698.52 lakh in respect of Mumbai Customs and ₹53.36 lakh in respect of Ahmedabad Customs.
Subsequently, the appellant sought Modvat/Cenvat credit of ₹822.89 lakh on the CVD component allegedly paid pursuant to the Settlement Commission order. While the Commissioner (Appeals) allowed credit of ₹752.22 lakh relating to imports under Notification No. 30/97-Cus dated 01.04.1997, the remaining claim of ₹70.67 lakh was rejected.
The Commissioner (Appeals) had held that imports covered under Notification No. 79/95-Cus dated 31.03.1995 were exempt only from Basic Customs Duty (BCD) and not from Countervailing Duty. Therefore, the disputed amount could not be treated as CVD eligible for Cenvat credit.
Before the Tribunal, the appellant argued that the entire amount had been paid pursuant to the Settlement Commission’s final order and once duty had been accepted by the department, the corresponding Cenvat credit could not be denied. It was also argued that the Commissioner (Appeals) had travelled beyond the original proceedings by making a new case regarding the nature of the duty paid.
The Tribunal, however, examined the Settlement Commission’s findings in detail and noted that two different notifications governed the Advance Licence Scheme during the relevant period — Notification No. 79/95-Cus dated 31.03.1995 and Notification No. 30/97-Cus dated 01.04.1997.
The bench observed that under Notification No. 79/95-Cus only Basic Customs Duty was exempt, whereas Notification No. 30/97-Cus exempted both Basic Customs Duty and CVD.
Referring to the findings recorded by the Settlement Commission, the Tribunal noted that the duty calculations relating to licences governed by Notification No. 79/95-Cus did not include any CVD component.
The Tribunal therefore concluded that the disputed amount of ₹70.67 lakh was not paid towards CVD and hence its credit could not be allowed under the Cenvat Credit framework.
Dismissing the appeal, the Tribunal held, “The amount of Rs. 70.67 lakhs, which appellant had requested for either allowing as Cenvat credit or by way of refund, was not paid towards CVD and therefore, its credit is not admissible to them.”
Case Details
Case Title: Aculife Healthcare Pvt Ltd Versus Commissioner Of Cgst & Central Excise Cgst & Central Excise Ahmedabad North
Citation: JURISHOUR-1113-CES-2026(AHM)
Case No.: Excise Appeal No. 11804 of 2017
Date: 05.05.2026
Counsel For Appellant: Sudhanshu Bissa, Advocate
Counsel For Respondent: A R Kanani, Superintendent (AR)
