TaxTMI 
TaxTMI 
2026 (4) TMI 1227
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....) paid on imported steam coal under Notification No. 12/2012-Cus dated 17.03.2012, as amended by Notification No. 12/2013Cus dated 01.03.2013. The Department's case is that the CVD paid at concessional rates of 1% / 2% under the said notification is not "equivalent to duty of excise" and, therefore, not eligible for credit under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004. 1.3 Based on the above, proceedings were initiated for the period from September 2012 to June 2017, which culminated in confirmation of demand, interest and penalty as mentioned in Para 1, leading to the present appeal. 2. The Ld. Advocate Shri Raghav Rajeev appeared on behalf of the Appellant. The Ld. Authorized Representative Ms. O.M. Reena, appeared for the Revenue. 3. The Ld. Counsel for the Appellant submitted that: - i. the issue is no longer res integra and stands settled in favour of the assessee by several Tribunal decisions. ii. CVD is levied under Section 3(1) of the Customs Tariff Act and is in the nature of customs duty, though measured with reference to excise duty. Therefore, credit eligibility depends on the nature of levy, not the rate or quantum. iii. Rule....
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....01.03.2013, and whether such CVD can be regarded as "additional duty of customs equivalent to duty of excise" within the meaning of Rule 3(1)(vii) of the CENVAT Credit Rules, 2004. The Department has denied the credit on the ground that the concessional rate of CVD is not "equivalent to duty of excise", whereas the appellant contends that eligibility to credit is dependent on the nature of duty and not the rate at which such duty is paid. 8.2 At the outset, it is necessary to examine the statutory framework. Section 3(1) of the Customs Tariff Act, 1975 provides for levy of additional duty of customs equivalent to the excise duty leviable on like goods manufactured in India. It is, however, well settled that the said duty, though measured with reference to excise duty, retains its character as a duty of customs. The expression "equivalent to duty of excise" has been judicially interpreted to refer to the measure or yardstick of levy and not to its intrinsic nature. Thus, the levy under Section 3 remains a customs duty, albeit quantified with reference to excise duty. 8.3 It is also relevant to clarify that the Countervailing Duty (CVD) paid on imported steam coal is nothing bu....
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....ion "equivalent to duty of excise" refers to the nature of the levy and not to the quantum of duty, and that credit cannot be denied merely on account of concessional rate. 8.6 Similarly, in Shyam Steel Industries Ltd. vs Commissioner of CGST & Central Excise, Bolpur, 2022 (382) E.L.T. 366 (Tri.-Kolkata), which was affirmed by the Hon'ble Calcutta High Court in 2022 (382) E.L.T. 329 (Cal.), it was held in Para 5 & 6 of the Tribunal Order that: "5. We find that the crux of the issue before us relates to admissibility of Cenvat credit of CVD on imported coal cleared at the rate of 1%/2% under Sl. No. 123 of the Customs Notification No. 12/2012-Cus dated 17 March 2012 as amended by Customs Notification No. 12/2013Cus dated 1 March 2013. There is no restriction in these notifications unlike Sl. No. 67 of Central Excise Notification No. 12/2012 dated 17 March 2012 in so far as the availment of Cenvat credit on coal is concerned. The credit of CVD is available under Rule 3(1)(vii) of the CCR and the proviso to Rule 3(1)(i) restricting credit in case of coal cleared under Excise Notification No. 12/2012 dated 17 March 2012 cannot impliedly be read into when the rate of CVD has....
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....e and that the appellant was entitled to retain the CENVAT credit of CVD paid on the imported steam coal. [Paras 9, 11]. 8.8 In Hindalco Industries Ltd. Vs. Commissioner of GST, Bhopal, 2018 (363) E.L.T. 1085 (Tri.-Del.), in Para 5 it was held: - "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(7) of Cenvat Credit Rules, 2004. Therefore, I hold that authorities below has applied wrong provision to deny Cenvat credit to the appellant. Therefore, Cenvat credit cannot be denied to the appellant. In that circumstances, I hold that the appellant has correctly availed the Cenvat credit of CVD paid on imported coal in terms of Rule 3 (7) of Cenvat Credit Rules, 2004. Further, I find that the show cause notice has been issued by invoking extended period of limitation. As the Revenue itself has applied wrong provisions of l....
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....ttled that circulars and administrative instructions cannot override statutory provisions. Where the statute and rules clearly permit availment of credit, such benefit cannot be denied by relying on executive instructions. The circulars relied upon by the Department do not expressly prohibit availment of credit and, in any event, cannot be interpreted in a manner contrary to the statutory scheme. 8.12 The interpretation sought to be placed by the Department on the expression "equivalent to duty of excise" as meaning equality in rate is not supported either by the statutory text or by judicial precedent. The word "equivalent" has to be understood in the context of measure of levy and not in the sense of exact numerical parity. Accepting the Department's interpretation would lead to anomalous results, whereby credit would be denied even when duty is paid under valid statutory provisions merely because the rate differs from the tariff rate. 8.13 The CENVAT scheme is designed to avoid cascading of taxes and to ensure seamless flow of credit. Denial of credit on the basis of concessional rate of duty would defeat the very purpose of the scheme and lead to unintended consequences. ....
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....ss it is deliberate. The ratio of the said judgment, as rightly relied upon by the appellant, is that suppression must be deliberate and accompanied by intent to evade duty, and cannot be inferred merely from an erroneous claim or a differing interpretation of law. Applying the above principle to the facts of the present case, where the issue pertains to interpretation of eligibility of CENVAT credit and all relevant particulars were disclosed in statutory records, the essential ingredient of wilful suppression with intent to evade duty is clearly absent. 9.5 In the present case, the issue relates to eligibility of credit on CVD paid at concessional rate under an exemption notification. The fact that multiple Tribunal decisions have been rendered on this very issue, as discussed in detail under Issue (i), clearly establishes that the matter is interpretational and debatable. When an issue is subject to differing interpretations and judicial scrutiny, it cannot be said that the assessee has suppressed facts or acted with intent to evade duty. 9.6 The Department has not brought on record any material to establish that the appellant had deliberately suppressed facts or misrep....