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TMI Blog2022 (2) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... cal issue has been considered by passing the Order No. A/12611- 12612/2021 dated 14.12.2021 in the case of Shree Arihant Tradelinks India Private Limited . The same is reproduced below: "5. We have carefully considered the submissions made by both the sides and perused the record. We find that appellant have availed Cenvat credit in respect of 2% CVD paid as per Notification No. 12/2012-Cus. Specific barw as provided under Rule 3(1)(i)(a) and (b) for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE. However, there is no bar provided in respect of CVD paid under Customs Notification No. 12/2012-Cus. For this reason itself, the Cenvat credit availed by the appellant in respect of CVD cannot be denied. We find that Revenue has disallowed Cenvat credit to the appellants in respect of CVD paid on imported Coal at the rate of 2% in terms of Notification No. 12/2012-Cus dated 17.03.2012. Only on the ground that the appellant have not paid CVD equivalent to the excise duty leviable on the Coal specified under clauses (i), (ii), (iii), (iv), (v), (vi) and(via) and applied clause (vii) of Rule 3 of Cenvat Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t schedule of Central Excise Tariff Act. Therefore, whenever CVD is paid, itflows from the Central Excise Tariff Act and not from the Customs Tariff Act and is not as per the duty specified in the Customs Tariff Act. Therefore, the entire basis of the interpretation made by the Adjudicating Authority regarding levy of CVD is erroneous and on that basis, the case of the department does not sustain. A very identical issue has come up in various cases before this Tribunal and this Tribunal has taken consistent view that Cenvat credit in respect of 2% concessional CVD paid on Coal is admissible. The direct judgment on the issue which considered various earlier decisions is reproduced below:- Hindustan Zinc Limited vs. Commissioner of CGST, Udaipur - FINALORDER No. 50855-50856 / 2020 1 to 8..................... "9. It is not in dispute that both Hindustan Zinc and Ultratech Cement paid additional duty of Customs under section 3 (1) of the Customs Tariff Act, after availing the benefit of the Customs Notification dated March 17,2012 and that they also availed CENVAT credit of the additional duty of customs so paid under rule 3(1)(vii) of the CENVAT Credit Rules. This availment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The said wrongly availed Cenvat credit, which was otherwise not admissible tothem, is liable to be recovered from the assessee along with interest under rule 14 of Cenvat Credit Rules, 2004 read with Section11A(4) and Section11AA of the Central Excise Act, 1944 and Section 174 of the Central Goods and Service Tax Act, 2017." 11. The Commissioner has, by the impugned order, not accepted the explanation offered by Hindustan Zinc for the following reasons: 25. "The notices have basically contended that they rightly availed Cenvat credit of the additional duty of customs paid @ 2% in terms of S. No. 122A or 123 of Notfn. No. 12/2012- Customs dated March 17, 2012, as amended by Notfn. No. 12/2013-Cus dated March 1,2013, as there is no such restriction or barring of credit in rule 3(1)(vii) similar to the restriction or barring in rule3(1)(i)(b) of CCR, 2004. Their contention is that they have taken credit of CVD as applicable under S.No.122A or 123 of 12/2012-Customs dated 17.12.2012 and not S. No. 67 of notification 12/2012-CE dated 17.03.2012. I do not agree with their contention because of the specific wording of the clause (i) and (vii) of sub rule 3(1) of CCR, 2004. From the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); ; (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 (23 of 2004);(via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of2007); (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v),(vi) and (via ****** 13. A bare perusal of rule 3(1)(i) indicates that a provider of output service shall be allowed to take CENVAT credit of the duty of excise specified in the First Schedule to the Excise Tariff Act specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act subject to the two conditions mentioned in proviso (a) & (b). However, ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that credit of CVD is available as per rule 3(1) (vii) of CENVAT credit rules. Please clarify. Reply: Since the subject goods were levied at reduced rate of 2% CVD on their importation in terms of section 3 of Customs Tariff Act, 1975 read with Notification issued therein i.e under Notification No. 12/2012-Cus. dated March 17, 2013 (and not under Notification No. 1/2011 CE) which was not excluded from the purview of Rule 3 of CENVAT credit rules, 2004, it appears that the CENVAT credit of CVD paid on imported coal (i.e. 2% adv.) under Notification No. 12/2012-Cus. dated 17.03.2013 is eligible for credit." 16. A Division Bench of the Tribunal in Hindalco Industries Ltd. considered this precise issue and held that if additional duty of customs has been paid after taking into consideration the Customs Notification dated March 17, 2012, there would be no bar for availment of CENVAT credit in terms of rule 3(vii) of the CENVAT Credit Rules. The relevant paragraph of the decision is reproduced below: "5 On careful consideration of the submissions made by both the sides, I find that the sole reason to deny Cenvat credit to the appellant is that the authorities below have taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic customs duty. The CVD has been paid at the said exempted rate taking the benefit of Sl. No. 123 of Customs Notification No. 12/2012-Cus., dated 17-3-2012. It is apparent from the order in challenge that Department has denied the payment of CVD on exempted rate and the availment of Cenvat credit thereupon relying upon theS. No. 67 of Excise Notification No. 12/2012, dated 17-3-2012. 7. Perusal of both these notifications reveal that the Customs notification is applicable to the imported coal whereas the Excise Notification is applicable to the domestically manufactured goods. The Condition No. 25 of Excise notification which denies availment of Cenvat credit on imports of coal manufactured by the supplier of coal, as has been taken the basis in the order-in-original, shall therefore be applicable for domestically manufactured goods only and not on the imported coal. Perusal of Excise Notification No. 67 further reveals that no such condition is applicable in case of import of coal. 8. The narrow compass of the adjudication, therefore, remains as to whether under Customs notification against S. No. 67 i.e., while importing the coal, the appellants were entitled to avail the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, even if the importer wants to avail the exemption of Notification No. 12/2012-CE for payment of CVD, the same will not be available to the importer. Therefore, in any case, inthe case of import the Notification No. 12/2012-CE is not relevant." "From the above Rule, it is observed that even if any duty is paid by availing exemption Notification No. 12.2012-CE dated 17.03.2012, the same will not be available as Cenvat credit for the user of the goods. In the present case,admittedly, the appellant have imported Coal and CVD of 2% is leviable in terms of Customs Notification No. 12/2012- Cus. There is no restriction provided in Rule 3 as regards duty paid under Customs notification. This restriction is applicable only in case of indigenous goods on which the excise duty @ 2% was paid availing Notification No. 12/2012-CE, which is not a case here. Therefore, the appellant is entitled for Cenvat credit in respect of CVD paid under Notification No.12/2012-Cus. Moreover, since the Notification No. 12/2012-CE is applicableonly in respect of indigenously manufactured coal and not in respect the imported coal as held by the Hob'ble Supreme Court in the case SRF Limited v s. CC, Chenna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT credit in the case of the present assessee flows from rule 3 of the Rules. As per sub-rule (1) of rule 3, a manufacturer or producer of a final product or a provider of output service would be allowed to take the CENVAT credit on the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act. Sub rule (1) rule 3 which gives the concession of availment of CENVAT credit of the duty paid, also uses the same expression "duty of excise" as is used in the proviso which restricts or limits the right of availment of such facility under certain circumstances. The expression "duty of excise" used in clause (i) of sub-rule (1) of rule 3 and the above noted proviso to thesaid rule, must receive same interpretation. The term "duty of excise" cannot have different connotations for the purpose of sub-rule (1) of rule 3 and for the purpose of proviso to the rule 3. Thus, if we accept the contention of the counsel for the assessee that the countervailing duty would not be included in the expression "duty of excise" for the purpose of the said rule, the assessee's very foundation of claiming the benefit of CENVAT credit would disappear. 21. This decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical issue many cases were made out bythe department across the country in respect of different assessees whichclearly shows that the issue involved is of interpretation of law. In thissituation, malafide intention cannot be attributed to the appellant. The appellant have been declaring availment of Cenvat credit in respect of 2% CVD and the same were reflected in monthly ER-1 returns. Therefore, thereis absolutely no suppression of facts or mis-declaration etc. on the part ofthe appellant. Accordingly, the demand for extended period is notsustainable on the ground of time-bar also. 9. As per our above discussion and findings, supported by Tribunal's decision in the case of Hindustan Zinc Limited (supra) and various decisions referred therein, the appellants are eligible for Cenvat credit inrespect of 2% CVD paid under Notification No. 12/2012-Cus. Accordingly,the impugned orders are set-aside and appeals are allowed withconsequential relief, if any, in accordance with law." 4. In view of the above order the assessees areentitled for cenvat credit in respect of 2% CVD paid under Notification No. 12/2012- Cus in respect of imported coal. Following the aforesaid order we hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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