2023 (11) TMI 57 - AT - Central Excise

CENVAT Credit - CVD of 2% paid on imported steam coal - Rule 3 of CCR 2004 - HELD THAT - The issue is whether the appellant is eligible to take the CENVAT Credit of 2% CVD paid on imported steam coal vide notification 12/2012 Cus. dated 17/3/2012. The issue has been considered by the Tribunal in the case of M/S. TAMIL NADU NEWSPRINT PAPERS LIMITED VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TIRUCHIRAPPALLI 2021 (10) TMI 13 - CESTAT CHENNAI where it was held that the adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification for manufacture of coal. Order is therefore, held not sustainable and accordingly, is hereby set aside. The demand cannot sustain and requires to be set aside. The impugned order is set aside. The appeal is allowed.

Summary

Issues involved:
The issue involves the eligibility of the appellant to take the CENVAT Credit of 2% CVD paid on imported steam coal under Notification 12/2012 Cus. dated 17/3/2012.

Comprehensive Details:

1. Facts and Background: The appellant, engaged in the manufacture of clinker and cement, imported steam coal for the generation of steam/electricity used in the manufacturing process. Central Excise duty on steam coal was levied at 5% ad valorem from 1/3/2011, with a concessional rate of 1% available subject to certain conditions. The appellant availed credit of the CVD paid on imported coal, leading to a dispute with the department.

2. Appellant's Argument: The appellant's counsel argued that Rule 3 of CCR 2004 does not restrict the availment of CENVAT credit of the 2% CVD paid on imported steam coal. They contended that the rule only limits the credit of excise duties paid under specific notifications, not applicable to the CVD on imported coal.

3. Department's View: The department contended that CVD of 2% paid on imported steam coal is not eligible for CENVAT credit under Rule 3 of CCR 2004. A Show Cause Notice was issued to recover the allegedly wrongly availed credit, along with interest and penalties.

4. Tribunal's Decision: The Tribunal, considering precedents like TNPL vs Commr. of GST & CEX, held that the appellant is entitled to avail the CENVAT Credit of 2% CVD paid on imported steam coal under Notification 12/2012 Cus. The Tribunal emphasized that the restriction under Rule 3 does not apply to the specific notification related to imported coal.

5. Precedents: The Tribunal cited various decisions supporting the appellant's position, such as Hindustan Zinc Ltd., Jaypee Sidhi Cement Plant, and SRF Limited cases. These decisions clarified that the CENVAT credit can be availed for imported coal under the relevant customs notification, despite restrictions under excise notifications.

6. Final Decision: Based on the precedents and legal interpretations, the Tribunal allowed the appeal, setting aside the demand raised by the department. The impugned order was overturned, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, upholding their right to claim CENVAT Credit for the 2% CVD paid on imported steam coal, as per the provisions of Notification 12/2012 Cus. dated 17/3/2012, and in accordance with relevant legal precedents.