2019 (3) TMI 191 - AT - Service Tax

Appellant granted CENVAT credit for Clean Energy Cess on coal/lignite in successful appeal

The Ramco Cements Ltd. Versus C.C.,C.E. & S. T-Commissioner Of Central Tax, Bangalore North West Commissionerate

The Ramco Cements Ltd. Versus C.C.,C.E. & S. T-Commissioner Of Central Tax, Bangalore North West Commissionerate - TMI Issues:Admissibility of CENVAT credit for Clean Energy Cess paid on imported/indigenous coal/lignite.Analysis:The appeal challenged an order confirming the demand for recovery of inadmissible CENVAT credit of Clean Energy Cess paid on coal/lignite by the appellants. The appellants argued that they were entitled to the credit as the Clean Energy Cess was levied as duty of excise under Section 83 of the Finance Act, 2010. They contended that provisions of the Central Excise Act, 1944 were applicable to Clean Energy Cess, enabling them to claim the credit. The appellants cited judicial precedents, including the case of Sri Renuka Sugars Ltd., to support their position that a duty of excise paid allows for CENVAT credit. They also challenged the penalty imposed under Rule 15(1) of CCR, stating it was not justified in their case.The respondent, however, defended the impugned order, arguing that the appellants were not entitled to CENVAT credit under Rule 3 of CCR as the Cess was not paid as duty of excise. The respondent highlighted the detailed analysis conducted by the Commissioner(Appeals) on the relevant legal provisions and notifications. They also mentioned that the decision of the Karnataka High Court in the case of Sri Renuka Sugars Ltd. was not applicable to the present case, as it was under challenge before the apex court.Upon reviewing the submissions and the material on record, the Judicial Member noted that a similar issue had been considered in the appellant's earlier case, where the Tribunal had allowed the appeal and granted CENVAT credit for Clean Energy Cess. Referring to the findings from the previous case, the Judicial Member reiterated that Clean Energy Cess was levied as duty of excise under Section 83 of the Finance Act, 2010, making the appellants eligible for the credit. Drawing parallels with the case of Sri Renuka Sugars Ltd., the Judicial Member concluded that the denial of CENVAT credit in the impugned order was not legally sustainable. Therefore, the impugned order was set aside, and the appeal of the appellant was allowed based on the precedent set in their earlier case.In conclusion, the Judicial Member pronounced the order in favor of the appellant, emphasizing the applicability of CENVAT credit for Clean Energy Cess paid on coal/lignite under the relevant legal provisions and judicial precedents, ultimately overturning the decision of the Commissioner(Appeals) and granting relief to the appellant.