2019 (3) TMI 240 - AT - Central Excise

Tribunal grants Cenvat Credit for CVD on imported coal

The Tribunal ruled that the appellants are entitled to Cenvat Credit for the countervailing duty (CVD) paid under a customs notification for the import of ... CENVAT Credit of CVD - Import of coal - N/N. 12/12-Cus dated 17.03.2012 - Held that:- The prohibition of availment of Cenvat credit on CVD paid on coal is only in respect of the duty paid under Central Excise N/N. 12/12-CE dated 17.02.2012 whereas in the present case the CVD was paid under N/N. 12/12-Cus dated 17.03.2012 on which there is no bar provided under Rule 3(1) Cenvat Credit Rules, therefore, the Cenvat Credit on the CVD paid on imported coal is admissible - credit allowed - appeal dismissed - decided against Revenue. Issues involved:Whether the appellants are entitled to Cenvat Credit for CVD paid under Notification No. 12/12-Cus dated 17.03.2012 on the import of Coal.Analysis:The issue in this case revolves around the admissibility of Cenvat Credit on the countervailing duty (CVD) paid under a specific customs notification for the import of coal. The Revenue argues that CVD at a rate of 2% paid on coal import is not admissible as Cenvat Credit, citing a judgment by the Hon'ble Gujarat High Court. On the other hand, the respondent contends that the prohibition of availing Cenvat credit on CVD paid on coal only applies to duty paid under a particular excise notification, not the customs notification under consideration. The respondent relies on a Tribunal decision to support their argument.The Tribunal, after considering the submissions from both sides and examining the records, refers to a previous case involving similar facts. In that case, the appellant had availed Cenvat credit on CVD levied under a customs notification, arguing that the restriction in Rule 3 of the Cenvat Credit Rules does not apply as they did not avail the excise notification. The Tribunal notes that the restriction under Rule 3 pertains to excise duty specified in the First Schedule to the Excise Tariff Act and goods exempted under a specific excise notification. Since the appellant imported coal and paid CVD under a customs notification, not excise duty under the relevant excise notification, the Tribunal concludes that Cenvat credit on the CVD paid for imported coal is admissible.The Tribunal further clarifies that the restriction in Rule 3 does not apply to duty paid under customs notifications, as evidenced by the absence of such a restriction in the rule. The Tribunal also highlights that the exemption under the relevant excise notification is not applicable to imported coal, as established by a Supreme Court judgment. Therefore, even if an importer seeks to avail the exemption for CVD payment under the excise notification, it would not be applicable. The Tribunal ultimately sets aside the impugned order, allowing the appeal with consequential relief in accordance with the law.In comparing the present case to a previous judgment cited by the Revenue, the Tribunal distinguishes the applicability of the rule barring Cenvat Credit on CVD paid under a customs notification from the case where the credit was disallowed under an excise notification. Consequently, the Tribunal upholds its decision, dismissing the Revenue's appeal based on the specific legal provisions and factual circumstances involved in the case.