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2022 (9) TMI 230 - HC - Central ExciseCENVAT Credit - Additional Duty of Customs (CVD) paid on imported coal - applicability of N/N. 12/2012-cus dated 17.03.2012 and 12/2013-Cus dated 01.03.2013 - the fact that no credit of excise duty at the concessional rate of 1% is available under the proviso to Rule 3(1)(i) of the Cenvat Credit Rules, was not appreciated - restriction on credit of CVD at the rate of 1%/2% - restriction of duty of excise in the Notification No. 1/2011 CE dated 01.03.2011 and in Notification No. 12/2012 CE dated 17.03.2012 read with Rule 3 of the Cenvat Credit Rules, 2004 is applicable to the countervailing duty, or not? HELD THAT - Identical issue has been decided in favour of the assessee by the tribunal in M/S HINDALCO INDUSTRIES LTD. APPELLANT VERSUS GST, BHOPAL RESPONDENT 2018 (3) TMI 1124 - CESTAT, NEW DELHI , holding that taking into consideration Notification No. 12/2012-Cus there is no bar for availment of CENVAT Credit in terms of the Rule 3(7) where duty paid under Notification No. 12/2012-Cus and CENVAT Credit cannot be denied. The tribunal rightly granted relief in favour of the respondent assessee and the order does not suffer from any error warranting interference - the appeal fails and is dismissed and the substantial questions of law are answered against the revenue.
Issues:
1. Eligibility of Cenvat Credit on imported coal under specific notifications. 2. Interpretation of restrictions on Cenvat Credit under relevant notifications. 3. Applicability of restrictions on countervailing duty. Analysis: Issue 1: Eligibility of Cenvat Credit on imported coal under specific notifications The appellant, a revenue authority, challenged the eligibility of the respondent to avail Cenvat Credit on imported coal under certain notifications. The respondent, engaged in manufacturing final products, faced allegations of contravening Cenvat Credit Rules by misdeclaring goods and evading duty. The dispute arose from a show cause notice proposing credit reversal, penalties, and interest. The Commissioner partially allowed the appeal, leading to the respondent's further appeal to the tribunal, which eventually ruled in favor of the respondent. The central question was whether the respondent could claim Cenvat Credit on Additional Duty of Customs (CVD) paid on imported coal under specific notifications. Issue 2: Interpretation of restrictions on Cenvat Credit under relevant notifications The revenue contended that restrictions under Cenvat Credit Rules applied to CVD as well, emphasizing the equivalence of CVD to excise duty. The tribunal, however, highlighted the absence of restrictions in the relevant notifications for availing Cenvat Credit on coal. It emphasized that strict interpretation of taxing statutes was necessary, and the tribunal's decision aligned with this principle. Reference was made to a previous decision and the interpretation of the term "equivalent" to support the respondent's position. Issue 3: Applicability of restrictions on countervailing duty The tribunal's decision was further supported by the Circular issued by CBEC, clarifying the applicability of concessional CVD rates. The Regional Advisory Committee's decision also favored the eligibility of Cenvat Credit on CVD paid on imported coal. Previous tribunal decisions in similar cases were cited to strengthen the respondent's position. The High Court upheld the tribunal's decision, emphasizing that no errors were found in the order, leading to the dismissal of the revenue's appeal. In conclusion, the High Court upheld the tribunal's decision in favor of the respondent, ruling that the appellant's appeal failed, and substantial questions of law were answered against the revenue.
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