2021 (9) TMI 915 - AT - Central Excise

CENVAT Credit - 2 percent CVD paid on import of coal - benefit of N/N. 12/12-Cus dated 17.03.2012 - HELD THAT - The issue is squarely covered by decision of CESTAT in the case of M/S. ASAHI SONGWON COLORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST., VADODARA 2018 (9) TMI 159 - CESTAT AHMEDABAD where it was 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 N/N. 12/2012-CE, which is not a case here. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat Credit on 2 percent CVD paid on import of coal availing notification no. 12/12-Cus dated 17.03.2012.

Analysis:

1. Denial of Cenvat Credit on 2 percent CVD:
The appeal in this case pertains to the denial of Cenvat Credit of 2 percent CVD paid on the import of coal by M/s Arti Industries Ltd. under notification no. 12/12-Cus dated 17.03.2012. The issue was examined in light of Rule 3 of the Cenvat Credit Rules. The Rule specifies restrictions on the allowance of Cenvat credit when excise duty is paid on goods availing certain exemptions. The Tribunal referred to a previous decision involving Asahi Songwon Colors Limited, where it was emphasized that the restriction under Rule 3 does not apply to duty paid under Customs notifications. It was noted that the exemption under Notification No. 12/2012-CE is applicable only to indigenously manufactured coal, not to imported coal. Therefore, the Tribunal held that the appellant is entitled to Cenvat credit for the CVD paid under Notification No. 12/2012-Cus, as the exemption is not relevant for imported coal.

2. Decision and Ruling:
Based on the analysis of the relevant legal provisions and precedents, the Tribunal allowed the appeal filed by M/s Arti Industries Ltd. and set aside the impugned order that denied the Cenvat credit on the 2 percent CVD paid on the import of coal. The Tribunal's decision was grounded in the interpretation of Rule 3 of the Cenvat Credit Rules and the specific applicability of the exemption under Notification No. 12/2012-CE to indigenously manufactured coal, excluding imported coal from its scope. Consequently, the appellant was deemed eligible for the Cenvat credit in respect of the CVD paid on the imported coal, as per the Customs notification.

In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad in this case clarifies the entitlement of Cenvat credit on the 2 percent CVD paid on imported coal under specific Customs notifications, emphasizing the distinction between exemptions for indigenously manufactured goods and imported goods. The ruling provides a clear interpretation of the relevant rules and exemptions, ensuring that the appellant can avail the Cenvat credit as per the applicable legal provisions.