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2021 (12) TMI 581 - AT - Central ExciseCENVAT Credit - input - Coal - denial on the ground that since the appellant has not paid duty at the Central Excise tariff rates and have paid duty less than that, as per Customs Notification No. 12/2012-Cus, appellant are not eligible for Cenvat credit - Time Limitation - HELD THAT - The appellant have availed Cenvat credit in respect of 2% CVD paid as per Notification No. 12/2012-Cus. Specific bar was provided under Rule 3(1)(i)(a) and (b) for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE. However, there is no bar provided in respect of CVD paid under Customs Notification No. 12/2012-Cus. For this reason itself, the Cenvat credit availed by the appellant in respect of CVD cannot be denied - Revenue has disallowed Cenvat credit to the appellants in respect of CVD paid on imported Coal at the rate of 2% in terms of Notification No. 12/2012-Cus dated 17.03.2012. Only on the ground that the appellant have not paid CVD equivalent to the excise duty leviable on the Coal specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via) and applied clause (vii) of Rule 3 of Cenvat Credit Rules. Tribunal has considered various decisions given by the different benches and also distinguished the decisions relied upon by the Revenue and concluded that the appellant is entitled for Cenvat credit in respect of 2% CVD paid under Notification No. 12/2012-Cus. Time Limitation - HELD THAT - The issue involved is purely of interpretation of Cenvat Credit Rules, levy of CVD in terms of Customs Tariff Act. It is also the fact that on identical issue many cases were made out by the department across the country in respect of different assessees which clearly shows that the issue involved is of interpretation of law. In this situation, malafide intention cannot be attributed to the appellant. The appellant have been declaring availment of Cenvat credit in respect of 2% CVD and the same were reflected in monthly ER-1 returns. Therefore, there is absolutely no suppression of facts or mis-declaration etc. on the part of the appellant. Accordingly, the demand for extended period is not sustainable on the ground of time-bar also. The appellants are eligible for Cenvat credit in respect of 2% CVD paid under Notification No. 12/2012-Cus. - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Admissibility of Cenvat credit on 2% CVD paid under Customs Notification No. 12/2012-Cus. 2. Interpretation of Rule 3(1) of the Cenvat Credit Rules, 2004. 3. Applicability of extended period of limitation for demand. Issue-wise Detailed Analysis: 1. Admissibility of Cenvat Credit on 2% CVD Paid under Customs Notification No. 12/2012-Cus: The appellants availed Cenvat credit on the 2% CVD paid on imported coal under Customs Notification No. 12/2012-Cus. The Revenue contended that Cenvat credit is only permissible if the CVD paid is equivalent to the excise duty specified under Rule 3(1) of the Cenvat Credit Rules, 2004. The Revenue argued that since the appellants paid a concessional rate of 2% instead of the standard excise duty rate, they were not eligible for Cenvat credit. However, the Tribunal found that Rule 3(1) of the Cenvat Credit Rules, 2004 does not bar Cenvat credit for CVD paid under Customs Notification No. 12/2012-Cus. The Tribunal noted that the nature of the duty remains excise duty, and the concessional rate does not alter this fact. Therefore, Cenvat credit on the 2% CVD paid under the said notification is admissible. 2. Interpretation of Rule 3(1) of the Cenvat Credit Rules, 2004: The Tribunal examined Rule 3(1) of the Cenvat Credit Rules, 2004, which allows Cenvat credit for specific duties, including additional duty of customs (CVD) equivalent to the excise duty specified. The Tribunal clarified that the proviso to Rule 3(1)(i) restricts credit for goods exempted under certain Central Excise notifications, but this restriction does not apply to CVD paid under Customs notifications. The Tribunal emphasized that the CVD, although paid at a concessional rate, is still considered equivalent to the excise duty specified in the Central Excise Tariff Act. The Tribunal referenced multiple judgments, including Hindalco Industries Ltd. and Hindustan Zinc Ltd., which supported the view that Cenvat credit is permissible for CVD paid under Customs Notification No. 12/2012-Cus. 3. Applicability of Extended Period of Limitation for Demand: The appellants argued that the demand was time-barred as the extended period of limitation was invoked without any malafide intention or suppression of facts. They contended that the issue involved interpretation of Cenvat provisions and Customs Tariff Act, and similar cases had been booked by the department, indicating no suppression of facts. The Tribunal agreed, noting that the appellants had declared the availment of Cenvat credit in their monthly ER-1 returns, and there was no evidence of mis-declaration or suppression. Consequently, the demand for the extended period was deemed unsustainable on the grounds of time-bar. Conclusion: The Tribunal concluded that the appellants were eligible for Cenvat credit on the 2% CVD paid under Customs Notification No. 12/2012-Cus. The interpretation of Rule 3(1) of the Cenvat Credit Rules, 2004 supported the appellants' case, and there was no bar on availing Cenvat credit for CVD paid under the said Customs notification. Additionally, the demand was time-barred due to the absence of malafide intention or suppression of facts. The impugned orders were set aside, and the appeals were allowed with consequential relief.
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