2018 (9) TMI 159 - AT - Central Excise

CENVAT credit of 2% CVD - Import of Coal - applicability of N/N. 12/2012-Cus dated 17.03.2012 - Rule 3 of Cenvat Credit Rules - Held that - Admittedly, the appellant have imported Coal and CVD of 2% is leviable in terms of Customs N/N. 12/2012-Cus. There is no restriction provided in Rule 3 as regards duty paid under Customs notification - This restriction is applicable only in case of indigenous goods on which the excise duty @ 2% was paid availing Notification No. 12/2012-CE, which is not a case here. Even if the importer wants to avail the exemption of N/N. 12/2012-CE for payment of CVD, the same will not be available to the importer - Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availment of Cenvat credit on 2% CVD under Notification No. 12/2012-Cus.
2. Applicability of Rule 3 of Cenvat Credit Rules regarding exemption under Notification No. 12/2012-CE.
3. Distinction between duty paid on indigenous goods and imported goods for Cenvat credit eligibility.

Analysis:

Issue 1: The appellant availed Cenvat credit of 2% CVD under Notification No. 12/2012-Cus. The department contended that the appellant wrongly claimed the credit.

Issue 2: Rule 3 of Cenvat Credit Rules was invoked by the department to argue that the appellant is not entitled to Cenvat credit if excise duty is paid on goods benefiting from exemption under Notification No. 12/2012-CE. The appellant argued that since they did not avail the excise Notification No. 12/2012-CE for indigenously manufactured coal, the restriction under Rule 3 does not apply to their case.

Issue 3: The Tribunal examined the applicability of Rule 3 and noted that the restriction on Cenvat credit under the rule pertains to excise duty paid on goods availing exemption under Notification No. 12/2012-CE. It was clarified that the restriction does not extend to duty paid under Customs Notification No. 12/2012-Cus for imported goods. The Tribunal also referenced a Supreme Court case to establish that the exemption under Notification No. 12/2012-CE is not relevant for imported coal, further supporting the appellant's eligibility for Cenvat credit on the CVD paid under Notification No. 12/2012-Cus.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant in accordance with the law. The judgment clarified the distinction between duty paid on indigenous goods and imported goods concerning Cenvat credit eligibility, emphasizing the specific application of Rule 3 in cases of exemption under Notification No. 12/2012-CE.