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TMI Blog2012 (11) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... raders in the North Eastern region as well as other parts of the country. They have challenged the levying of 5% excise duty with cess on the coal purchased by them from the Coal India Ltd. claiming that levying of such 5% of excise duty is illegal and instead ought to have been levied only 1.03% duty in terms of the Government of India's Notification No. 1/2011-C.E., dated 1-3-2011. 3. It has been stated by the writ petitioners that "coal" falls under Chapter 27 of the Central Excise Tariff Act, 1985 and there is 5% excise duty of coal and 3% cess on the duty tariff. However, in exercise of the powers conferred under sub-section (1) of Section 5A(1) of the Central Excise Act, 1944, the Central Government had issued a notification under Notification No. 1/2011-C.E., dated 1-3-2011 exempting various goods which includes "coal" from paying excise duty in excess of amount calculated at the rate of 1% ad valorem. It has been further provided in the said notification dated 1-3-2011 that the aforesaid notification shall not apply to the goods in respect of which credit of duty on inputs or tax on input services has been taken under the provisions of CENVAT Credit Rules, 2004. Rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al India authorities charged excise duty at 5% plus cess, i.e. 5.15% in spite of petitioners giving information to the respondents that the petitioners are not availing any CENVAT Credit and as such, in stead of 5.15%, the excise duty levied ought to be 1.03%. The petitioners also state that when the petitioner No. 2 in W.P.C. No. 2489 of 2011 purchased one rack of coal from Mineral Development and Trading Corporation Ltd. Arunachal Pradesh, the said company charged excise duty only at the rate of 1.03%. 6. It is the case of the petitioners that since the petitioners are not availing the CENVAT Credit, in terms of the aforesaid notification issued by the Government of India, only 1.03% of the excise duty is leviable in respect of the coal purchased by the petitioners from the Coal India Ltd. Accordingly, the petitioners claim that since levying of 5.15% is illegal, the said amounts of duty charged from the petitioners by the coal authorities are liable to be refunded except the amount to the extent of 1.03% leviable. The petitioners also contend that since the petitioners have been illegally charged more excise duty without any authorization, they have been prejudiced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer, has availed the CENVAT Credit under the provisions of the CENVAT Credit Rules, 2004, the aforesaid exemption given under Notification No. 1/2011-C.E., dated 1-3-2011 will not be applicable, and the central excise duty at the rate of 5% plus cess as fixed tariffs are leviable on "coal". (iv) The respondents/Coal India Ltd. has stated that the company after due deliberations and in the best interest of company and in public interest being a public undertaking had decided to avail the CENVAT Credit under the provisions of CENVAT Credit Rules, 2004 and accordingly, has proposed to levy Central Excise duty on coal at the rate of 5% (5.15% including cess). Accordingly, it informed all the Coal India Ltd. production units under its letter dated 7-3-2011 that the Central Excise duty at the rate of 5% (including 0.15% cess) on coal may be levied to enable it to avail the CENVAT credit under the provisions of CENVAT Credit Rules, 2004. Therefore, the Respondents/Coal India contends that the Company has rightly imposed Central Excise at the rate of 5.15% (including cess) so as to enable the Company to avail CENVAT credit under the provisions of CENVAT Credit Rules, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on inputs or tax on input services has been taken under the provisions of the CENVAT Credit Rules, 2004. 10. It may be stated that with reference to the notification dated 1-3-2011, corresponding amendment was made in Rule 3 of the CENVAT Credit Rules, 2004 relevant portions of which may be reproduced herein below :- "Rule 3. CENVAT Credit. - (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT Credit) of : (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; [Provided that CENVAT Credit of such duty of excise shall not be allowed to be taken when paid on any goods in respect of which the benefit of an exemption under Notification No. 1/2011-C.E., dated the 1st March, 2011 is availed;] (ii).............................. ................................." From the aforesaid Rule 3, it is clear that the proviso to Rule 3(1)(i) which was inserted w.e.f. 1-3-2011 by Notification No. 3/2011-C.E. (N.T.), dated 1-3-2011 pursuant to the Notification No. 1/2011-C.E., dated 1-3-2011 provides that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Coal India Ltd. is availing CENVAT credit under the CENVAT Credit Rules, 2004. 13. The respondent/Coal India Ltd. had also contended that Notification No. 1/2011-C.E., dated 1-3-2011 only provides a conditional exemption and not a total exemption to pay only at the rate of 1% in as much as the said exemption is available only when credit facility under the CENVAT Credit Rules are not availed of and since the Coal India authorities have decided to avail of the CENVAT credit facilities, the excise duty is leviable at the rate of 5% with cess. The Coal India Ltd. had the choice either to avail or not to avail of the CENVAT credit facility under CENVAT credit Rules, 2004. Thus, if the Coal India Ltd. had decided to avail the CENVAT credit, the exemption could not have been applied, and such an option exercised by the Coal India Ltd. could not be faulted with. 14. It may be also observed that the condition of non-availing of CENVAT credit, if exemption is sought for as specified in the said Notification No. 1/2011-C.E., dated 1-3-2011 applies only to the manufacturer of excisable goods and the said condition does not apply to the non-manufacturer buyer of the goods. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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