TaxTMI 
TaxTMI 
2022 (7) TMI 978
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....Cenvat credit of 2% CVD paid on import of steam coal is admissible or not to the assessee/respondents in accordance with Notification No. 12/2012-Cus dated 17/03/2012 as amended, in terms of embargo contained under Rule 3 of the Cenvat Credit Rules, 2004? 3. It is a case of Revenue that the assessee have availed Cenvat credit of additional duty paid @ 1% or 2% on imported coal leviable under Section 3 of Customs Tariff Act, 1975 (CVD) under Notification No. 12/2012-Cus dated 17/03/2012 as amended by Notification No. 12/2013-Cus dated 01/03/2013 which is not available to the manufacture importer under Cenvat Credit Rules, 2004 as the same is not specified rate of duty prescribed under Central Excise Tariff Act, 1985 r/w the notification issued under the Central Excise Act, 1944 or rules made thereunder. 4. Now, we will place the fact briefly in each of the appeals before us:- i) E/51032/2019- In this appeal, the assessee who are manufacturing clinckers and cement, availed Cenvat credit on CVD paid on imported coal as per Notification No. 12/2012-Cus dated 17/03/2012 as amended by Notification No. 12/2013-Cus dated 01/03/2013 which according to Revenue was not available to the man....
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....preferred by the respective assessee/respondent, the learned Commissioner (Appeals) vide impugned orders of different dates, allowed the respective appeals filed by the assessee/respondents. 6. We have heard learned Authorised Representative appeared for Revenue and learned Counsel for respective assessee/respondents and perused the case records including the written submissions alongwith the case laws placed on record. The assessee herein have availed Cenvat credit, in respect of 1%/2% CVD paid as per Notification No. 12/2012-Cus. The specific bar on which the Revenue is harping upon is provided under Rule 3 (1) (i) (a) (b) ibid for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE but in our view, there is no such bar in respect of CVD paid under Customs Notification No.12/2012-Cus, therefore the assessee/respondents are eligible for Cenvat credit in respect of 1% or 2% CVD, as the case may be, paid under Notification No. 12/2012-Cus. Otherwise also, the issue involved in these appeals is no more res integra and is covered in favour of assessee in view of various decisions of this Tribunal on the ident....
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.... of 2001); ; (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via):" ****** 13. A bare perusal of rule 3(1)(i) indicates that a provider of output service shall be allowed to take CENVAT credit of the duty of excise specified in the First Schedule to the Excise Tariff Act specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act subject to the two conditions mentioned in proviso (a) & (b). However, rule 3(1)(vii) provides that a provider of output service shall be allowed to take credit of the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via). 14. The Commissioner has mixed up rule 3(1)(i) and rule 3(1)(vii) of rule ....
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....ch 17, 2013 (and not under Notification No. 1/2011 CE) which was not excluded from the purview of Rule 3 of CENVAT credit rules, 2004, it appears that the CENVAT credit of CVD paid on imported coal (i.e. 2% adv.) under Notification No. 12/2012- Cus. dated 17.03.2013 is eligible for credit." 16. A Division Bench of the Tribunal in Hindalco Industries Ltd. considered this precise issue and held that if additional duty of customs has been paid after taking into consideration the Customs Notification dated March 17, 2012, there would be no bar for availment of CENVAT credit in terms of rule 3(vii) of the CENVAT Credit Rules. The relevant paragraph of the decision is reproduced below: "5. On careful consideration of the submissions made by both the sides, I find that the sole reason to deny Cenvat credit to the appellant is that the authorities below has taken into consideration Notification No. 12/2012-CE., dated 17-3-2012. The authorities below have not considering the Notification No. 12/2012-Cus., dated 17-3-2012. If same is taken into consideration and duty paid under the said notification, there is no bar for availment of cenvat credit in terms of Rule 3 (vii) of Cenvat Credit....
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.... the S. No. 67 of Excise Notification No. 12/2012, dated 17-3-2012. 7. Perusal of both these notifications reveal that the Customs notification is applicable to the imported coal whereas the Excise Notification is applicable to the domestically manufactured goods. The Condition No. 25 of Excise notification which denies availment of Cenvat credit on imports of coal manufactured by the supplier of coal, as has been taken the basis in the order-in-original, shall therefore be applicable for domestically manufactured goods only and not on the imported coal. Perusal of Excise Notification No. 67 further reveals that no such condition is applicable in case of import of coal. 8. The narrow compass of the adjudication, therefore, remains as to whether under Customs notification against S. No. 67 i.e., while importing the coal, the appellants were entitled to avail the Cenvat credit on the amount of CVD paid. The Cenvat credit is applicable as per Rule 3(1) of the Cenvat Credit Rules, 2004. Clause 7 thereof entitles the appellants to avail the Cenvat credit in the given circumstances. The said Rule itself clarifies that the Cenvat credit of duty of excise is not allowed to be taken w....
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...., however, placed reliance upon the decision of the Gujarat High Court in Lonsenkiri Chemicals Industries. 20. This decision is clearly distinguishable on facts. The appellant therein had availed the benefit of serial numbers 67 and 128 of the Central Excise Notification dated March 17, 2012. It is for this reason that the High Court held that because of the condition set out in proviso (b) of rule 3(1)(i) of the CENVAT Credit Rules that the appellant would not be entitled to avail CENVAT credit. The relevant portion of the judgment of Gujarat High Court is reproduced below: "2. The appellant imports coal on which ordinarily countervailing duty in the nature of excise duty would be payable. However, by virtue of notifications 1 of 2011 dated 01.03.2011 and Sr. No. 67 and 128 of exemption notification 12 of 2012 dated 17.03.2012, the assessee would either pay duty at the reduced rate or Nil rate of duty. In this context, the question of allowing the assessee to claim CENVAT credit arose. The Revenue authorities and the Tribunal held that 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 ....
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....id under the Notification No. 12/12-CE which was barred from availing the Cenvat Credit in terms of Rule 3(1) proviso (a) and (b) whereas in the present case in Rule 3(1) there is no bar provided for CVD paid under Notification No. 12/12-Cus., therefore, the judgement of Hon'ble High Court in Lonsenkiri Chemicals Industries (supra) is not applicable to the facts of the present case." 22. The Commissioner, therefore, committed an illegality in denying the benefit of CENVAT credit to Hindustan Zinc. 23. On the other hand, the Commissioner (Appeals), in the matter of Ultratech Cement, after considering the provisions of rule 3 of the CENVAT Credit Rules and the decision of the Tribunal in Hindalco Industries Limited and the Minutes of the Meeting of the Regional Advisory Committee of Hyderabad Zone held on February 9, 2015, held that Ultratech Cement was justified in taking the CENVAT credit. The Commissioner (Appeals) also found that the judgment of the Gujarat High Court in Lonsenkiri Chemicals Industries would not be applicable to the facts of the case and in this connection placed reliance on the decision of the Tribunal in Aarti Industries Limited. 24. For the reasons also ....
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....mption under Notification No. 1/2011-CE, 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-CE, dated the 17th March, 2012 is availed; ..... ..... (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) [, (vi) and (via)]: (viii) ..... " 6. We find that in terms of clause (vii) of Rule 3(i) of Cenvat Credit Rules, Cenvat credit is allowed in respect of the additional duty leviable under Section 3 of Customs Tariff Act, 1975 equivalent to the duty of excise specified under clause (i). As per clause (i) of Rule 3(1), the duty of excise specified in the first schedule 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 concession....