Manufacturer allowed Cenvat Credit on imported coal under Notification No.12/2012-CUS

The Tribunal allowed the appeal, holding that the appellant, a manufacturer of sponge and iron and steel items, was eligible to avail Cenvat Credit of the CVD paid on imported coal under Notification No.12/2012-CUS. The Tribunal rejected the Department's contention that the appellant was ineligible for the credit, emphasizing that the relevant notification did not bar importers from taking Cenvat Credit. The Tribunal also overturned the lower authorities' rejection of the appellant's refund claim, clarifying that the prohibition on Cenvat Credit for manufacturers under Notification No.12/2012 CX did not apply to the appellant as the receiver of the goods.

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Issues involved:
The appellant's eligibility to avail Cenvat Credit of the CVD paid at the time of coal import under Notification No.12/2012-CUS dated 17/03/2012 and the rejection of their refund claim.

Eligibility to avail Cenvat Credit:
The appellant, a manufacturer of sponge and iron and steel items, imported coal and cleared it by paying Custom Duty and CVD as per Notification No.12/2012-CUS. The Department contended that the appellant was ineligible to avail Cenvat Credit of the CVD paid during import. The appellant, after depositing Excise Duty and continuing litigation, filed a refund claim stating they paid the amount under a mistaken interpretation. The Tribunal noted that Notification No.12/2012-CUS specifies a 1% CVD payment requirement without barring the importer from taking Cenvat Credit. Contrary to the Department's reliance on Notification No.12/2012 CX, which restricts Cenvat Credit for manufacturers, the Tribunal referenced relevant case law to support the appellant's position.

Refund claim rejection:
The lower authorities rejected the appellant's refund claim based on Notification No.12/2012 CX, which prohibits Cenvat Credit for manufacturers. However, the Tribunal found that this Notification was erroneously applied to the appellant, who was the receiver of the goods. Citing precedents, the Tribunal emphasized that the relevant Notification No.12/2012-CUS did not restrict Cenvat Credit for importers. The Tribunal highlighted previous decisions that affirmed the appellant's right to avail Cenvat Credit of the CVD paid on imported coal. Consequently, the Tribunal allowed the appeal and granted consequential relief in accordance with the law.

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