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2022 (2) TMI 302 - AT - Central ExciseCENVAT Credit - CVD paid at the rate of 2% on the imported coal in terms of Notification No 12/2012-CUS dated 17.03.2012 or otherwise - HELD THAT - The identical issue has been considered in SHREE ARIHANT TRADELINKS INDIA PRIVATE LIMITED AND MAHA SHAKTI COKE VERSUS C.C.E., KUTCH (GANDHIDHAM) 2021 (12) TMI 581 - CESTAT AHMEDABAD where it was held that 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. The assessees are entitled for cenvat credit in respect of 2% CVD paid under Notification No. 12/2012- Cus in respect of imported coal - the assesses in the present appeals are entitled for cenvat credit. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to Cenvat Credit for CVD paid at the rate of 2% on imported coal under Notification No. 12/2012-CUS. 2. Interpretation of Rule 3(1) of the Cenvat Credit Rules, 2004. 3. Applicability of extended period for demand due to alleged suppression of facts. Detailed Analysis: 1. Entitlement to Cenvat Credit for CVD Paid at the Rate of 2% on Imported Coal: The primary issue was whether the assessees were entitled to Cenvat Credit for the Countervailing Duty (CVD) paid at 2% on imported coal under Notification No. 12/2012-CUS dated 17.03.2012. The Tribunal referred to previous judgments, including the case of Shree Arihant Tradelinks India Private Limited, which established that there is no bar under Rule 3(1)(i)(a) and (b) of the Cenvat Credit Rules for availing Cenvat credit on CVD paid under Customs Notification No. 12/2012-CUS. The Tribunal concluded that the Cenvat credit availed by the appellant in respect of CVD could not be denied, as the restriction applied only to excise duty under specific conditions, not to CVD under the Customs Notification. 2. Interpretation of Rule 3(1) of the Cenvat Credit Rules, 2004: The Tribunal analyzed Rule 3 of the Cenvat Credit Rules, 2004, particularly clauses (i) and (vii). It found that Rule 3(1)(vii) allows Cenvat credit for additional duty under Section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clause (i). The Tribunal emphasized that the concessional CVD rate of 2% under the Customs Notification does not alter the nature of the duty specified in the Central Excise Tariff Act. Therefore, the 2% CVD paid is considered equivalent to the excise duty specified in the first schedule of the Central Excise Tariff Act, making it eligible for Cenvat credit. 3. Applicability of Extended Period for Demand Due to Alleged Suppression of Facts: On the issue of limitation, the Tribunal noted that the matter involved interpretation of the Cenvat Credit Rules and the Customs Tariff Act. It was evident that similar cases had been made across the country, indicating the issue was one of legal interpretation rather than malafide intent. The Tribunal found that the appellants had declared the availment of Cenvat credit in their monthly ER-1 returns, showing no suppression of facts or mis-declaration. Consequently, the demand for an extended period was deemed unsustainable due to time-bar. Conclusion: The Tribunal concluded that the assessees were entitled to Cenvat credit for the 2% CVD paid under Notification No. 12/2012-CUS on imported coal. The appeals of M/s Narayani Coke Pvt. Ltd and M/s Welspun Steel Ltd were allowed, and the appeal filed by the Revenue in the case of Nayara Energy Ltd was dismissed. The Tribunal also set aside the impugned orders, granting consequential relief in accordance with the law.
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