Custom, Excise & Service Tax Tribunal
Ambuja Cements Limited vs Commissioner, Cgst & Central Excise ... on 3 February, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH,
COURT NO. III
EXCISE APPEAL NO. 50257 OF 2021
[Arising out of the Order-in-Original No. JOD-EXCUS-000-COM-0018-20-21
dated 04/08/2020 passed by Commissioner, Central Goods & Service Tax,
Central Excise, Jodhpur.]
M/s Ambuja Cements Limited ...Appellant
(Unit : Rabriyawas),
P.O. - Rabriyawas, Tehsil - Jaitaran,
District - Pali,
Rajasthan - 306 709.
Versus
Commissioner, Central Goods & ...Respondent
Service Tax, Central Excise, G-105, road No. 5, New Industrial Area, Basni, Opp. Diesel Shed, Jodhpur, Rajasthan - 342 003.
APPEARANCE:
Ms. Sukriti Das, Advocate for the appellant.
Shri Rakesh Agarwal, authorized representative for the Department CORAM:
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL) FINAL ORDER NO. 50478/2023 DATE OF HEARING/DECISION : 03.02.2023 P.V. SUBBA RAO M/s Ambuja Cements Limited1 filed this appeal to assail order-in-original dated 04.08.20202 passed by the Commissioner, Central Goods & Service Tax, Central Excise, Jodhpur, whereby 1 appellant 2 impugned order
2 EX/50257 OF 2021 he decided the show cause notice3 dated 28.11.2019 issued to the appellant for the period November 2014 to June 2017 and denied Cenvat credit of Rs. 2,08,35,230/- and imposed an equal amount of penalty on the appellant.
2. The appellant manufactures clinker and cement falling under Chapter 25 of the Central Excise Tariff and avail Cenvat credit on the inputs, capital goods and input services under Cenvat Credit Rules4, 2004. The dispute is about the Cenvat credit availed by the appellant on additional duty of customs of 1% - 2% paid by it on the imported coal availing the benefit of Customs Notification No. 12/2012 - CUS dated 17.03.2012. It is undisputed that the coal was used in manufacture of the final products and that the additional duty of customs was paid after availing the benefit of the Customs Notification No. 12/2012- CUS.
3. The case of the Revenue is that the aforesaid customs notification is identical to Notification No. 12/2012-CE and Cenvat credit of duty paid under this Central Excise notification cannot be availed as per proviso (b) to Rule 3 (i) of CCR. In other words, if any domestically manufactured inputs were used by an assessee and the central excise duty thereon was paid after availing the benefit of Notification No. 12/2012-CE no credit of duty will be available to the assessee. Although, there is no corresponding restriction in clause (vii) of Rule 3 of the CCR with 3 SCN 4 CCR 3 EX/50257 OF 2021 respect to any additional duty of customs paid availing the benefit of Customs Notification No. 12/2012-CUS, since this Notification is similar to the Central Excise Notification according to the Revenue, no credit will be available even when the customs notification is availed to pay additional duty of customs.
4. The SCN accordingly proposed to recover the Cenvat credit so availed and imposed penalties which were affirmed in the impugned order.
5. Learned counsel for the appellant submits that the impugned order is not sustainable for the reason that there is no bar on availing Cenvat credit of the additional duty of customs paid under section 3 of the Central Tariff Act availing the benefit of Customs Notification No. 12/2012-CUS. It is not open for the adjudicating authority to introduce restrictions which are not in the rules. She submits that the issue is squarely covered by a catena of decisions of this Tribunal, in which it was held that the Cenvat credit will be available in identical situations. In particular, she draws attention of the Bench to the decision of this Bench in the case of Commissioner of Central Excise and Customs, Central Goods and Service Tax, Jaipur versus M/s Shree Cement Ltd. decided by final order No. 50630- 50633/2022 dated 21.07.2022. The relevant paragraphs are reproduced below :-
―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 4 EX/50257 OF 2021 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 3 of the CENVAT Credit Rules. It is for this reason that the conditions specified in rule 3(1)(i) have also been imported into rule 3 (1)(vii) of the CENVAT Credit Rules. In the first instance, Hindustan Zinc had not paid duty of excise specified in the First Schedule of the Excise Tariff Act, nor it had availed the benefit of the Central Excise Notification dated March 1, 2011 or that specified in serial numbers 67 and 128 in respect of which the benefit of an exemption under Central Excise Notification dated March 17, 2012 had been availed. In fact, Hindustan Zinc had paid additional duty of customs by availing the benefit under serial number 122A/123 of the Customs Notification dated March 17, 2012. It is because of this misreading of rule 3(1) of the CENVAT Credit Rules that led the Commissioner to commit an error‖.
6. She further submits that identical decision was taken by the Kolkata Bench of the Tribunal in the case of M/s Shyam Steel Industries Limited versus Commissioner of CGST & CX, Bolpur Commissionerate5. Revenue's appeal against this decision was rejected and the decision of Tribunal was upheld by the Hon'ble High Court of Kokata. Paragraphs 9 and 10 of the 5 2021 (12) TMI 956 - CESTAT KOLKATA 5 EX/50257 OF 2021 order of the judgment of the Kolkata High Court are reproduced below :-
―9. Identical issue has been decided in favour of the assessee by the tribunal in Hindalco Industries Limited versus GST, Bhopal 2018 (363) E.L.T. 1085 (Tri. - Del.), holding that taking into consideration Notification No. 12/2012-Cus there is no bar for availment of CENVAT Credit in terms of the Rule 3 (7) where duty paid under Notification No. 12/2012-Cus and CENVAT Credit cannot be denied. Identical view was taken by the tribunal in CCE and ST, Surat - I versus M/s Aarti Industries Limited 2019 (3) TMI 240- CESTAT, Ahmedabad, M/s Asahi Songwon Colors Limited versus CCE & ST, Vadodara 2018 (9) TMI 159 - CESTAT Ahmedabad, Commissioner of Central Excise, Customs & CGST, Jaipur - I & Ors. versus Shree Cement Limited 2022 (7) TMI 978 - CESTAT New Delhi, SRF Limited versus Commissioner of Customs, Chennai 2015 (318) ELT 607 (SC), and M/s Tamil Nadu Newsprint & Papers Limited versus Commissioner of GST & Central Excise, Tiruchirappalli 2021 (10) TMI 13 - CESTAT Chennai. The above decisions rendered by the tribunal have not been shown to have been reversed to modified by the High Court.
10. In the light of the above discussions, we are of the considered view that the tribunal rightly granted relief in favour of the respondent assessee and the order does not suffer from any error warranting interference‖.
7. Learned counsel submits that the Kolkata High Court considered various decisions of this Tribunal including the decision of Shree Cement Limited of this Bench and upheld the decision. Therefore, the issue has attained finality at the level of High Court also. She, therefore, prays that their appeal may be allowed and the impugned order may be set aside.
8. Learned authorized representative for the Revenue supports the impugned order and submitted that the decision of this Tribunal in the case of Shree Cement Limited and the decision of Kolkata High Court in the case of Shyam Steel should be considered as per-incuriam and should not be followed for the reasons :-
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(i) The concessional rate of additional duty of customs paid by virtue of Customs Notification No. 12/2012-CUS is not equivalent to the duty of excise specified in Clause
(i) to Clause (vii) allows credit of additional duty of customs paid under section 3 of the Customs Tariff Act equivalent to the duty of excise specified in Clause (i)
(ii) (iii) (iv) (v) (vi) and (vi a). Proviso (b) to Clause (i) bars the credit of duty of excise paid on domestic coal under Notification No. Notification No. 12/2012-CE and the credit of duty on inputs/input services barred by condition of the said notification. For the purpose of CVD excise duty for the time being enforce would be levied on a live of if produced or manufactured bonafide should be considered. In other words, we have to forget that the goods are imported, imagine that the importer had manufactured the goods intended, determine the amount of excise duty that he would have been called up to pay in such an event. If the coal had been domestically manufactured the manufacturer would have to pay either full rate of duty or he could have paid duty availing the benefit of Notification No. 12/2012-CE;
(ii) The principal of National Treatment should be followed and imported goods cannot be put in an advantageous position over the domestic goods. These factors have not been considered by the earlier decisions ;
(iii) He relies on the case law of Apex court in SRF Ltd.
versus Commissioner of Customs, Chennai6 in which the Supreme Court held that in quantification of additional duty, imported article has to be imagined to be manufactured or produced in India and then see what amount of excise duty is to be levied thereon.
9. We have considered the submissions made on both sides and perused the records.
10. When goods are imported into India duty of customs is leviable under the Customs Act, 1962 at the rates specified in the schedule to the Customs Tariff Act, 1975. Additionally, some duties are also leviable under the Customs Tariff Act, 1975. In this case, the additional duty of customs equivalent to the excise 6 2015 (318) E.L.T. 607 (S.C.) 7 EX/50257 OF 2021 duty is levied under section 3 (1) of the Customs Tariff Act is relevant which is reads as follows :-
―SECTION 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. -- (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article :‖
11. Cenvat Credit Rules allow the assessee to avail Cenvat credit of several duties and taxes as per Rule 3 (1) which reads as follows :-
―RULE 3. CENVAT credit. -- (1) A manufacturer or producer of final products or a [provider of output service] shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of -
(i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act :
Provided that CENVAT credit of such duty of excise shall not be allowed to be taken when paid on any goods -
(a) in respect of which the benefit of an exemption under Notification No. 1/2011-C.E., 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-
C.E., dated the 17th March, 2012 is availed;
(ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act;
(iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978);
(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957);
(v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001);
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(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):‖
12. It is undisputed that if coal is domestically produced and duty is paid availing the benefit of Notification No. 12/2012-CE dated 17 March, 2012, by virtue of proviso (b) to Clause (i) of Rule 3, the assessee will not be eligible to take Cenvat credit. There is no corresponding limitation on availing the Cenvat credit of additional duty of customs paid availing the benefit of Customs Notification No. 12/2012-CUS under section 3 of the Customs Tariff Act as per Clause (vii) of Rule 3 of CCR. It is for this reason that this tribunal held in the case of Shree Cement and several other decisions that if coal is imported into India availing the benefit of the Customs notification for additional duty of customs, Cenvat credit will be available. This decision was affirmed by the Hon'ble High Court of Kolkata in Shyam Steel Ltd.
13. The submission of the learned authorized representative for the Revenue that the benefit of Cenvat credit under Clause (vii) will be available only if it is equivalent to the duty of excise specified in Clauses (i) (ii) (iii) (iv) (v) (vi) and (vi a) and will not be available, if any duty is paid availing the benefit of notification cannot be accepted. Learned authorized representative has completely misunderstood the meaning and context of the 9 EX/50257 OF 2021 expression ―equivalent to the duty of excise specified in clauses
(i) (ii) (iii) (iv) (v) (vi) and (vi a)‖ in clause (vii). Duties of excise are levied under a Central Excise Act, 1944 as well as under
several other laws for specific purposes and on specific commodities. These include several cesses which are levied on individual commodities. A cess is also levied as duty of excise. Therefore, if any goods are imported and if a cess is leviable on such goods if they are manufactured in India, by virtue of section 3 of the Customs Tariff Act, additional duty of customs equivalent to such cess also has to be levied. In other words, while there are several forms of excise duty including cesses which are levied under various laws, if the goods are manufactured or produced in India only some of these are cenvatable which are listed to Clause (i) to (vi a). Similarly, if the goods are imported into India additional duty of customs equivalent to all the cesses is leviable on the goods but what is cenvatable is only such additional duty of customs as is equivalent to one of the cenvatable duties of excise. If a cess is levied which is not listed in Clauses (i) to (vi
a) and an equivalent amount of additional duty of customs is levied under section 3, such additional duty of customs is not cenvatable.
14. The submission of the learned authorized representative that the principal of National Treatment must be followed and imported goods cannot be put at an advantage overall domestic goods also cannot be accepted and his views are contrary to the law. If the CCR disallowed excise duty paid under Notification No. 10 EX/50257 OF 2021 12/2012-CE but did not disallow additional duty of customs paid under Notification No. 12/2012-CUS, Cenvat credit cannot be denied by simply drawing an analogy. If the intention was to deny Cenvat credit, CCR would have said so but they do not.
15. In view of above, the impugned order is set aside and the appeal is allowed with consequential benefits, if any, to the appellant.
(Order dictated and pronounced in open court.) (P.V. SUBBA RAO) MEMBER (TECHNICAL) (BINU TAMTA) MEMBER (JUDICIAL) PK