2023 (3) TMI 946 - AT - Central Excise

Disallowance of taken CENVAT Credit on clean energy cess levied on coal - seeking recovery along with interest under section 11AA and imposed penalty under Rule 15 (1) of Cenvat Credit Rules, 2004 read with section 11AC - HELD THAT - The issue involved in this appeal is identical to the issue involved in respect of the same appellant in M/S ACC LIMITED VERSUS COMMISSIONER OF C.G.S.T. C.E. JABALPUR 2019 (6) TMI 1192 - CESTAT NEW DELHI . It was held in the final order that the appellant was not entitled to Cenvat credit on the clean energy cess paid by it and accordingly the appeal was dismissed. There are no reason to take different view in this appeal - the appellant was not entitled to Cenvat credit of the clean energy cess paid - appeal dismissed.

Summary

Issues Involved:
1. Entitlement to Cenvat credit on clean energy cess levied on coal, peat, and lignite.
2. Classification of clean energy cess as excise duty, tax, or fee.

Summary:

1. Entitlement to Cenvat Credit on Clean Energy Cess:
The appellant challenged the order-in-original dated 17.12.2018, which disallowed Cenvat credit of Rs. 8,54,39,430/- taken on clean energy cess levied on coal and ordered its recovery along with interest u/s 11AA and imposed a penalty under Rule 15(1) of Cenvat Credit Rules, 2004 read with section 11AC. The Tribunal noted that the issue was identical to a previous appeal (No. E/52864 of 2018) where it was held that the appellant was not entitled to Cenvat credit on the clean energy cess paid. The appellant's counsel acknowledged that the previous order had not been stayed or over-ruled by a higher judicial forum.

2. Classification of Clean Energy Cess:
The Tribunal analyzed whether the clean energy cess qualifies as excise duty, tax, or a fee. Section 83 of the Finance Act, 2010, imposes the clean energy cess as a duty of excise on goods specified in the Tenth Schedule. The Tribunal referred to multiple case laws to determine the nature of the cess. It concluded that despite being nomenclated as excise duty, the clean energy cess was collected for specific purposes like funding clean energy initiatives and was not for general public use. Hence, it was classified as a fee rather than a tax or excise duty. Rule 3 of CCR, 2004, applies only when the payment is excise duty or tax, not a fee. Therefore, the appellant was not entitled to Cenvat credit on the clean energy cess.

Conclusion:
The Tribunal, following the precedent decision, held that the appellant was not entitled to Cenvat credit of the clean energy cess paid. The appeal was dismissed, and the order under challenge was confirmed.