Cenvat credit on 1%/2% CVD paid on imported steam coal under notification 12/2012-Cus allowed

The CESTAT Chennai held that Cenvat credit on 1%/2% CVD paid on imported steam coal under notification 12/2012-Cus dated 17.03.2012 was allowable. Following precedent from Chettinad Cements Corporation and Tamil Nadu Newsprint Papers Limited cases, the Tribunal set aside the demand raised by authorities denying the Cenvat credit. The impugned orders were quashed and the appeal was allowed, establishing that such CVD payments qualify for Cenvat credit benefits.

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Issues involved:
The issue involved in the judgment is the eligibility of the appellant to take Cenvat credit of 1%/2% CVD paid on imported Steam Coal under Notification No.12/2012-Cus dated 17.03.2012.

Summary:

Background:
The appellant, engaged in the manufacture of Clinker and Cement, imported Steam Coal for use in generating steam/electricity for manufacturing their final product. The duty rates on Steam Coal varied, with concessional rates available under specific notifications.

CBEC Clarification:
A CBEC letter clarified the applicable rates and conditions for CVD on imported items, emphasizing the impact on domestic manufacturers and the need for equitable tax treatment.

Amendments:
Tariff rates on Steam Coal were amended over time, affecting the concessional rates and conditions for excise duty and Cenvat credit eligibility.

Department's View:
The department contended that CENVAT Credit of CVD on Steam Coal could only be availed if paid at the Tariff Rate of 6% adv., not at concessional rates, leading to show cause notices and demands on the appellant.

Appellant's Argument:
The appellant argued that Rule 3 of CCR 2004 did not restrict Cenvat credit on CVD paid on imported Steam Coal at concessional rates, citing relevant case law in their favor.

Tribunal Decision:
The Tribunal, based on previous decisions, including M/s. Tamil Nadu Newsprint and Papers Limited, ruled in favor of the appellant, setting aside the demand for denying Cenvat credit on imported Steam Coal.

Conclusion:
The Tribunal found in favor of the appellant, setting aside the demands and allowing the appeals with consequential reliefs, based on the interpretation of relevant notifications and case law.

This summary encapsulates the key issues, arguments, and the Tribunal's decision in the legal judgment regarding the eligibility of Cenvat credit on imported Steam Coal under specific notifications.

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