2023 (9) TMI 6 - AT - Central Excise

Refund claim - amount paid under a mistaken interpretation - applicability of N/N. 12/2012 CX dated 17/03/2012 - HELD THAT - From the Notification, it is clear that the it has been issued in respect of manufacturer of the goods. In case the manufacturer wants to clear the coal on concessional rate @1%, he is not eligible to take the Cenvat Credit of input and inputs services. The Department is error in applying this Notification to the appellant who is the receiver of the goods. The very issue was before the Tribunals in the case of M/S HINDALCO INDUSTRIES LTD. VERSUS GST, BHOPAL 2018 (3) TMI 1124 - CESTAT, NEW DELHI , the Tribunal has held the appellant has correctly availed the Cenvat credit of CVD paid on imported coal in terms of Rule 3(7) of Cenvat Credit Rules, 2004. Appeal allowed.

Summary

Issues involved:
The appellant's eligibility to avail Cenvat Credit of the CVD paid at the time of coal import under Notification No.12/2012-CUS dated 17/03/2012 and the rejection of their refund claim.

Eligibility to avail Cenvat Credit:
The appellant, a manufacturer of sponge and iron and steel items, imported coal and cleared it by paying Custom Duty and CVD as per Notification No.12/2012-CUS. The Department contended that the appellant was ineligible to avail Cenvat Credit of the CVD paid during import. The appellant, after depositing Excise Duty and continuing litigation, filed a refund claim stating they paid the amount under a mistaken interpretation. The Tribunal noted that Notification No.12/2012-CUS specifies a 1% CVD payment requirement without barring the importer from taking Cenvat Credit. Contrary to the Department's reliance on Notification No.12/2012 CX, which restricts Cenvat Credit for manufacturers, the Tribunal referenced relevant case law to support the appellant's position.

Refund claim rejection:
The lower authorities rejected the appellant's refund claim based on Notification No.12/2012 CX, which prohibits Cenvat Credit for manufacturers. However, the Tribunal found that this Notification was erroneously applied to the appellant, who was the receiver of the goods. Citing precedents, the Tribunal emphasized that the relevant Notification No.12/2012-CUS did not restrict Cenvat Credit for importers. The Tribunal highlighted previous decisions that affirmed the appellant's right to avail Cenvat Credit of the CVD paid on imported coal. Consequently, the Tribunal allowed the appeal and granted consequential relief in accordance with the law.