2023 (4) TMI 166 - AT - Central Excise

CENVAT Credit on clean energy cess levied on coal - recovery of interest with penalty - HELD THAT - The issue involved in this appeal is identical to the issue involved in respect of the same appellant in 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. As the issue involved in this appeal is identical to the above, there are no reason to take different view in this appeal. Respectfully following the precedent decision of this Tribunal, it is held that 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.
2. Classification of clean energy cess as excise duty, tax, or fee.

Summary:

Entitlement to Cenvat Credit on Clean Energy Cess:
The appellant challenged the order-in-original dated 11.03.2019, which disallowed Cenvat credit of Rs. 12,73,38,600/- 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. Both parties acknowledged 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 clean energy cess.

Classification of Clean Energy Cess:
The substantial question of law was whether the clean energy cess qualifies as excise duty, tax, or merely a fee. Section 83 of the Finance Act, 2010, which imposes the cess, was analyzed. The clean energy cess, although nomenclated as a duty of excise, was determined to be a fee based on its specific purpose of funding clean energy initiatives and not for general public use. The cess was credited to the Consolidated Fund of India but earmarked for specific purposes, indicating it was not a tax or excise duty but a fee.

Legal Precedents and Analysis:
The judgment referred to several case laws, including the Constitution Bench decisions in Kewal Krishna Puri v. State of Punjab and Hingir Rampur Coal Co. Ltd. v. State of Orissa, which distinguished between tax, fee, and cess. It was concluded that the clean energy cess did not meet the criteria of a tax or excise duty but was a fee due to its specific allocation for clean energy purposes.

Conclusion:
Rule 3 of CCR, 2004, applies only to excise duty or tax, not to fees. Hence, the appellant was not entitled to Cenvat credit on the clean energy cess. The Tribunal upheld the order under challenge, confirming that the clean energy cess is a fee and not a duty or tax, and dismissed the appeal.

Final Decision:
The appeal was dismissed, and the order was confirmed, following the precedent decision of the Tribunal.