Case law

Custom, Excise & Service Tax Tribunal · 2 Mar 2026

Birla Century vs Bharuch

Legal principle

The Foreign Trade Policy bar on simultaneously availing SHIS and TUFS binds only the original status holder in respect of its own exports and cannot defeat the entitlement of a transferee of SHIS scrips to import capital goods and take Cenvat credit under condition 8 of Notification No. 104/2009-Cus read with the Cenvat Credit Rules, 2004.

Court decision

The Tribunal set aside the Order-in-Original and allowed the appeal. It held that the SHIS-TUFS simultaneity restriction applies only to the original licence holder to whom the scrips were issued on the basis of its own exports, and not to a transferee like the appellant, and that the FTP and Notification No. 104/2009-Cus do not bar but rather provide for Cenvat credit of duties on capital goods imported against SHIS; the Commissioner's finding of contravention was 'not sustainable and without any foundation.'

Facts

Birla Century, a division of Century Textiles & Industries Ltd manufacturing excisable goods under Chapters 52 and 63, purchased Status Holder Incentive Scrips (SHIS) from the market and used them to debit BCD, CVD and ACD (Rs. 5,86,55,640) on capital goods imported during 2013-14 to 2015-16 under Notification No. 104/2009-Cus, while taking Cenvat credit of CVD and SAD of Rs. 4,25,63,600 on those goods. CERA audit found it had also availed Technology Upgradation Fund Scheme (TUFS) benefits (Rs. 11.42 crore in 2013-14 and Rs. 7.42 crore in 2014-15), on which basis the department alleged simultaneous availment of SHIS and TUFS contrary to para 3.16.2 of FTP 2009-14 and Notification No. 33/2012-CE. A show cause notice dated 22.06.2016 was adjudicated by the Commissioner, whose Order-in-Original dated 30.11.2016 confirmed recovery of Cenvat credit of Rs. 5,86,55,614 with interest and an equal penalty under Rule 14/15(2) of the Cenvat Credit Rules, 2004 read with Sections 11A(4), 11AA and 11AC of the Central Excise Act, 1944.

Key provisions