AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1738
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2015, the Appellant paid Additional Duty of Customs (CVD) at the concessional rate of 2% on imported steam coal under Notification No. 12/2012Cus and availed CENVAT credit of the same under Rule 3 of the CENVAT Credit Rules, 2004. On verification of records, the Department formed a view that concessional excise duty applicable to indigenous coal under Notification No. 1/2011CE and Notification No. 12/2012-CE, being subject to the condition of non-availment of credit, would equally apply to imported goods, and accordingly issued Show Cause Notice dated 22.04.2016 proposing recovery of CENVAT credit amounting to Rs. 3,17,74,936/- under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, along with interest under Section 11AA and imposition of penalty under Rule 15(2) read with Section 11AC. The Appellant contested the proceedings, contending that there is no restriction in law for availment of credit of CVD paid under Notification No. 12/2012-Cus and that conditions applicable to excise duty cannot be extended to CVD. However, the adjudicating authority rejected the contentions and confirmed the demand along with interest and equal penalty....
X X X X Extracts X X X X
X X X X Extracts X X X X
....il, considered the statutory provisions and the case laws cited. 8. Upon consideration, the following questions arise for determination: - i. Whether CENVAT credit of Additional Duty of Customs (CVD) paid at concessional rate under Notification No. 12/2012-Cus is admissible to the Appellant under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004, and, ii. Whether the demand of reversal of CENVAT credit by invocation of extended period, and imposition of interest and penalty are legally sustainable. 9. We now proceed to examine the issues arising for determination in the light of the statutory framework, the provisions of the CENVAT Credit Rules, 2004, the applicable notifications, the factual matrix of the case, and the judicial precedents relied upon by both sides. Issue (i): Whether the Appellant is entitled to avail CENVAT credit of additional duty of customs (CVD) paid at concessional rate under Notification No. 12/2012-Cus. 10. We find that the controversy in the present case centres around the interpretation of Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 read with Section 3 of the Customs Tariff Act, 1975. The said provision specifically allows....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sition of penalties. Consequently, the impugned Orders-in-Original, confirming the demand of CENVAT credit along with interest and imposing penalties, are set aside in toto." The ratio of the above decision clearly establishes that CENVAT credit of additional duty of customs cannot be denied merely on the ground that such duty has been paid at a concessional rate and that the nature of levy under Section 3 of the Customs Tariff Act remains unchanged. 13. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e condition denying CENVAT in that notification is therefore inapplicable to imports. Relying on earlier decisions (including SRF Ltd. and the Tribunal's decision in TNPL), the Tribunal concluded that denial of credit by invoking the Excise notification against a Customs notification was legally unsustainable and that the appellant was entitled to retain the CENVAT credit of CVD paid on the imported steam coal. [Paras 9, 11]. 15. A similar view has been taken by the Tribunal in M/s. Chettinad Cements Corporation Pvt. Ltd. & Ramco Cements Ltd. v. Commissioner of CGST & Central Excise, Trichy, 2024(6) TMI 13 CESTAT -Chennai wherein it was held that the restriction on availment of credit under the proviso to Rule 3(1) applies only in cases where exemption under Central Excise Notification No. 12/2012-CE is availed in respect of domestically manufactured goods and that such restriction cannot be extended to imported goods covered by Customs Notification No. 12/2012-Cus. The Tribunal emphatically held that the Customs notification granting concessional CVD operates independently and does not incorporate any condition denying credit, and therefore denial of CENVAT credit on such b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....redit, while a domestic manufacturer paying equivalent duty would be entitled to credit, thereby disturbing the parity envisaged under Section 3 of the Customs Tariff Act. Such an interpretation would defeat the object of the levy and cannot be accepted. 20. In view of the foregoing analysis, we hold that the Appellant is entitled to avail CENVAT credit of the additional duty of customs paid at concessional rate under Notification No. 12/2012-Cus and that the denial of such credit is not sustainable in law. Accordingly, Issue No. (i) is decided in favour of the Appellant. Issue (ii): Whether the demand, invocation of extended period, interest and penalty are sustainable 21. Having held that the Appellant is entitled to avail CENVAT credit, the very foundation of the demand does not survive and the same is liable to be set aside. Even otherwise, we find that the invocation of the extended period of limitation is not justified in the facts and circumstances of the present case. The case of the Department is that the Appellant wrongly availed CENVAT credit contrary to the provisions of the CENVAT Credit Rules, 2004 and thereby rendered themselves liable for invocation of the ....