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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 ..... Application No. 10356 of 2019 - A/10074-10076 /2022 - Dated:- 4-2-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri. Hardik Modh, Vishal Agarwal, Ramnath Prabhu and Ms, Dimple Gohil,Advocates for the Appellant Shri. Vinod Lukose, Superintendent (AR) for the Respondent ORDER The issue involved in the present case is that whether the assesseesare entitled for Cenvat Credit in respect of CVD paid at the rate of 2% on the imported coal in terms of Notification No 12/2012-CUS dated 17.03.2012 or otherwise. 2. Heard Shri.Hardik Modh, Learned Counsel appearing for M/s Welspun Limited and M/s Narayani Coke Pvt Ltd (Appellants) and Shri Vishal Agarwal , Shri Ramnath Prabhu and Ms. Dimple Gohil, Learned Counsel for Nayara Energy Limited (Respondent) and perused the records. 3. The identical 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% CV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Central Excise Tariff Act, 1985 leviable under the Excise Act. In the present case, there is no dispute that the duty of excise is indeed specified in first schedule of Central Excise Tariff Act,1985 which is leviable under the Excise Act. It is only by Customs Notification, the concession in rate of duty was provided i.e. @ 2% under Notification No. 12/2012-Cus. Only since the concessional rate is provided under Customs Notification, the nature of excise duty specified in the first schedule to the Central Excise Tariff Act does not get altered. The Adjudicating Authority has ignored the fact that there is not the rate of CVD provided in the Customs Tariff Act and the rate of duty is provided in Central Excise Tariff Act. Therefore, in our view, even the 2% which is nothing but a concessional CVD in lieu of excise duty and the same is specified in the first 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1985 is 6% and the effective rate is 1%or2% vide Notification No. 12/2012-CE dated 17.03.2012, as amended, subject to the condition stated therein. In this case, 2% Additional Duty on imported steam coal/bituminous coal as per Notification No. 12/2012-Cus dated 17.03.2012 as amended by Notification No. 12/2013-Cus dated 01.03.2013 has been paid by the assessee. Further, it is found that the said duty of 2% is not specified under Central Excise Tariff Act, 1985 read with any notification issued under Central Excise Act, 1944 or rules made thereunder, therefore the credit of said duty of 2% paid as Additional Duty of customs does not appear to beadmissible to them. 12. From the above, it appears that the assessee has wrongly availed total Cenvat credit amounting to ₹ 2,75,97,106/- (As per Annexure A ) in contravention of the provisions of Rule 3 of Cenvat Credit Rules, 2004. 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 Good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is as follows: RULE 3. CENVAT credit- (1) A manufacturer or producer of final products or a provider of output 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- (a) in respect of which the benefit of an exemption under Notification No.1/2011-C.E., dated the 1st March, 2011 is availed; or(b) specified in serial numbers 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012-C.E.,dated the 17th March, 2012 is availed. (ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act;; (iii) the additional duty of excise leviable under section 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 Calami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Notification) is available for credit. The relevant portion of the minutes is reproduced below: MINUTES OF THE MEETING OF THE REGIONAL ADVISORY COMMITTEE, HYDERABAD ZONE HELD ON FEBRUARY 09, 2015. Point No. 1 Credit on imported coal:-Many manufactures are importing steam coal on payment of duties. As per Customs Notification No. 12/2012-Cus. They are availing concessional CVD @2%. Audit is of the view that since CVD has been paid @ 2% on imported coal, the credit under Cenvat Credit Rules is not available. Audit is taking a view that CVD in lieu of Excise duty and if 2% duty has been paid on imports the credit is not admissible because a manufacturer who is procuring coal domestically where excise duty has been paid @ 2%, the credit is not available. Board has issued a circular No.41/2013-Cus. dated 21.10.2013 where it has been clarified that 2% of CVD is general applied rate and therefore it is industry s view 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar goods and manufactured in India, that the benefit of Customs Notification No.12/12 has wrongly been denied vide Order. Learned Counsel has relied upon the decision of this Tribunal in the case of M/s. Hindalco Industries Ltd. vs. GST, Bhopal as was pronounced in Appeal No.E/50179/2018-SM vide Final Order No. 50876/2018, dated 8-3-2018 [2018(363) E.L.T. 1085 (Tri.-Del.)]. Reliance has also been placed on another decision of the Tribunal in the case of Asahi Songwon Colors Ltd. v. CCE ST, Vadodara Appeal No. E/10635/2017-SM vide Final Order No. A/11585/2018(Ahmd.),dated 9-7-2018. Therefore, the order in challenge is prayed to beset aside and appeal is prayed to be allowed. 5. Learned Departmental Representative justified the orders. 6. After hearing both the parties and perusing the record, we are of the opinion as follows: It is admitted that the appellants have imported coal consequent thereto they have paid 1%/2% on CVD in addition to Basic 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced below: 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 isno 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 applicable only in respect of indigenously manufactured coal and not in respect the imported coal as held by the Hon ble Supreme Court in the case SRF Limited vs. CC, Chennai- 2015 (318) ELT 607 (SC). Therefore, 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 Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by virtue of proviso to rule 3(1) of CENVAT credit Rules,2004, ( the Rules for short) in view of the benefit availed by the assessee and the said exemption notifications, CENVAT credit would not be allowable. It is this view which the assessee has challenged before us. ******** 3. It is not in dispute that the assessee has availed of the benefit of exemption notification 1 of 2011 and also the benefits under Sr. 67 and 128of exemption notification 12 of 2012. In that view of the matter, the above noted proviso of the Rules, would disen title the assessee from claiming CENVAT credit. Counsel for the assessee however submitted that this provisorefers to CENVAT credit of such duty of excise . In the present case, what the assessee has paid was the countervailing duty. The same may have been computed in terms of excise duty payable on local manufacturers,nevertheless, the same cannot be treated as duty of excise per se. He however candidly agreed that facility for getting CENVAT 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 allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble tothe facts of the case and in this connection placed reliance on the decisionof the Tribunal in Aarti Industries Limited. 24. For the reasons also discussed above, there is no error in the order passed the Commissioner (Appeals) in the matter of Ultratech Cement. 25. Thus, for all the reasons stated above, Excise Appeal No. 52928 of 2019 filed by Hindustan Zinc is allowed and the order dated September24, 2019 passed by the Commissioner is set aside. Excise Appeal No.52774 of 2019 filed by the Commissioner is dismissed. 7. The above decision of the Tribunal has considered various decisions given by the different benches and also distinguished the decisions reliedupon by the Revenue and concluded that the appellant is entitled for Cenvatcredit in respect of 2% CVD paid under Notification No. 12/2012-Cus. 8. On the issue of limitation, we find that the issue involved is purely ofinterpretation of Cenvat Credit Rules, levy of CVD in terms of Customs TariffAct. It is also the fact that on identical 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 la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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