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2021 (10) TMI 13 - AT - Central ExciseCENVAT Credit of CVD - import of steam coal which is used for generation of steam / electricity which is in turn used in relation to the manufacture of final products - concessional rate of duty as per N/N. 1/2011-CE dt. 1.3.2011 (Sl.No.28) denied as appellants has already availed the benefit of N/N.12/2012-Cus. 17.3.2012 - applicability of Board s Circular No.41/2013-Cus. dt. 21.10.2013 - HELD THAT - The bar to take cenvat credit is only when the benefit of exemption specified at Sl.No.67 and 128 under N/N.12/2012-CE dt. 17.3.2012 is availed. The CCR 2004 does not impose any bar or restriction in availing credit when the benefit of exemption is availed under the N/N.12/2012-Cus. dt. 17.3.2012. The issue stands decided in the decision of Hindustan Zinc Ltd. 2021 (7) TMI 199 - CESTAT NEW DELHI where on similar issue, credit was allowed. The demand cannot sustain - Appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Rule 3 of Cenvat Credit Rules, 2004 regarding eligibility to take credit for Central Value Duty (CVD) paid on imported steam coal under Notification No.12/2012-Cus. dated 17.3.2012. Detailed Analysis: The appellants, engaged in manufacturing Printing and Writing paper, import steam coal for generating steam/electricity used in manufacturing final products. Central Excise duty on steam coal was levied at 5%, but a concessional rate of 1% was available under Notification No.1/2011-CE subject to conditions. The appellants paid 2% CVD on imported coal and availed credit. The department contended that Rule 3 of CCR 2004 made such credit ineligible, leading to a Show Cause Notice for recovery and penalties. The original authority upheld the demands and penalties, prompting the appellant to appeal. The appellant argued that Rule 3(1)(i) to (vii) of CCR 2004 does not restrict credit for CVD paid on imported steam coal under Notification No.12/2012-Cus. dated 17.3.2012. They cited Circular No.41/2013-Cus. clarifying that CVD credit is available under Rule 3(1)(vii) for such imports. The Regional Advisory Committee also supported this view, emphasizing that the Cenvat credit of CVD paid on imported coal under this Customs Notification is eligible. The appellant further referenced a decision by a coordinate Bench of the Tribunal in a similar case, Hindustan Zinc Ltd. Vs CCG & ST Udaipur, where it was held in favor of the assessee. The Tribunal, after considering the arguments and precedents, concluded that the issue was covered by the Hindustan Zinc Ltd. case. It was clarified that the bar on taking Cenvat credit only applies when availing exemption under specific Excise Notifications, not Customs Notifications like No.12/2012-Cus. The Tribunal set aside the impugned orders, allowing the appeals with consequential relief. In summary, the Tribunal ruled in favor of the appellant, holding that the Cenvat credit of CVD paid on imported coal under Notification No.12/2012-Cus. dated 17.3.2012 was eligible despite the department's contentions. The decision was based on the interpretation of Rule 3 of CCR 2004 and supported by relevant circulars and precedents, ultimately leading to the dismissal of the demands and penalties imposed by the original authority.
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