Custom, Excise & Service Tax Tribunal
Narayani Coke Private Limited vs Kutch (Gandhidham) on 4 February, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Excise Appeal No.12102 of 2019
(Arising out of OIO-KCH-EXCUS-000-COM-05-2019-20dated 13/06/2019 passed by
Commissioner of Central Excise, Customs and Service Tax-KUTCH (GANDHIDHAM))
Narayani Coke Private Limited ........Appellant
At Village- Lunva, P.O.Chopadva
Kutch,
Gujarat
VERSUS
C.C.E.-Kutch (gandhidham) .......Respondent
Central Excise & Service Tax Commissionerate, Centeral Excise Bhavan Plot No. 82, Sector
8, Gandhidham(Kutch),Gujarat
WITH
Excise Appeal No.10510 of 2020
(Arising out of OIO-KCH-EXCUS-000-COM-03-2020-21dated 26/06/2020passed by
Commissioner of Central Excise, Customs and Service Tax-KUTCH (GANDHIDHAM))
WELSPUN STEEL LTD ........Appellant
Survey No.650, Po- Versamedi, Tal. Anjar
Kutch,
Gujrat
VERSUS
C.C.E.-KUTCH (GANDHIDHAM) .......Respondent
Central Excise & Service Tax Commissionerate, Centeral Excise Bhavan Plot No. 82, Sector
8, Gandhidham(Kutch),
Gujarat
AND
Excise Appeal No.10545 of 2019
Excise Miscellaneous (CROSS) Application No. 10356 of 2019
(Arising out of OIO-RAJ-EXCUS-000-COM-08-18-19dated 14/11/2018passed by
Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-
RAJKOT)
C.C.E. & S.T.-Rajkot ........Appellant
Central Excise Bhavan,
Race Course Ring Road...Income Tax Office,
Rajkot,Gujarat- 360001
VERSUS
Nayara Energy Limited .......Respondent
Formerly Known As Essar Oil Limited
Jam Khambhaliya, Po Box No 24,
Devbhumi, Dwarka
Gujarat
APPEARANCE:
Shri. Hardik Modh, Vishal Agarwal, Ramnath Prabhu and Ms, Dimple
Gohil,Advocates for the Appellant
Shri. Vinod Lukose, Superintendent (AR) for the Respondent
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CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR
HON'BLE MEMBER (TECHNICAL), MR. RAJU
Final Order No. A/ 10074-10076 /2022
DATE OF HEARING: 05.10.2021
DATE OF DECISION: 04.02.2022
RAMESH NAIR
The issue involved in the present case is that whether the
assesseesare entitled for Cenvat Credit in respect of CVD paid at the rate
of 2% on the imported coal in terms of Notification No 12/2012-CUS dated
17.03.2012 or otherwise.
2. Heard Shri.Hardik Modh, Learned Counsel appearing for M/s Welspun
Limited and M/s Narayani Coke Pvt Ltd (Appellants) and Shri Vishal Agarwal
, Shri Ramnath Prabhu and Ms. Dimple Gohil, Learned Counsel for Nayara
Energy Limited (Respondent) and perused the records.
3. The identical issue has been considered by passing the Order No.
A/12611- 12612/2021 dated 14.12.2021 in the case of Shree Arihant
Tradelinks India Private Limited . The same is reproduced below:
"5. We have carefully considered the submissions made by both the
sidesand perused the record. We find that appellant have availed
Cenvat credit in respect of 2% CVD paid as per Notification No.
12/2012-Cus. Specific barwas provided under Rule 3(1)(i)(a) and (b)
for availing Cenvat credit inrespect of goods exempted from payment
of excise duty under NotificationNo. 1/2011-CE and 12/2012-CE.
However, there is no bar provided inrespect of CVD paid under
Customs Notification No. 12/2012-Cus. For thisreason itself, the
Cenvat credit availed by the appellant in respect of CVDcannot be
denied. We find that Revenue has disallowed Cenvat credit to
theappellants in respect of CVD paid on imported Coal at the rate of
2% interms of Notification No. 12/2012-Cus dated 17.03.2012. Only
on theground that the appellant have not paid CVD equivalent to the
excise dutyleviable on the Coal specified under clauses (i), (ii), (iii),
(iv), (v), (vi) and(via) and applied clause (vii) of Rule 3 of Cenvat
Credit Rules. TheRevenue‟s contention is incorrect that as per clause
(vii) of Rule 3(1)additional duty leviable under Customs Tariff Act is
equivalent to duty ofexcise duty specified under clause (i) of Rule 3(1)
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is paid. Rule 3 of theCenvat Credit Rules, 2004 is reproduced as
under:-
Rule-3
(1) A manufacturer or producer of final products or a provider of
taxable service shall beallowed to take credit (hereinafter referred to
as the CENVATcredit) of -
(i) the duty of excise specified in the First Schedule to the Excise Tariff
Act , leviableunder 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-CE,dated the 1st March, 2011 is availed; or
(b) specified in serial numbers 67 and 128 in respect of which the
benefit of anexemption under Notification No. 12/2012-CE, dated the
17thMarch,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
underSection 3 of Customs Tariff Act, 1975 equivalent to the duty of
excisespecified under clause (i). As per clause (i) of Rule 3(1), the
duty of excisespecified in the first schedule to the Central Excise Tariff
Act, 1985 leviableunder the Excise Act. In the present case, there is no
dispute that the dutyof excise is indeed specified in first schedule of
Central Excise Tariff Act,1985 which is leviable under the Excise Act. It
is only by CustomsNotification, the concession in rate of duty was
provided i.e. @ 2% underNotification No. 12/2012-Cus. Only since the
concessional rate is providedunder Customs Notification, the nature of
excise duty specified in the firstschedule to the Central Excise Tariff
Act does not get altered. TheAdjudicating Authority has ignored the
fact that there is not the rate of CVDprovided in the Customs Tariff Act
and the rate of duty is provided in CentralExcise Tariff Act. Therefore,
in our view, even the 2% which is nothing but aconcessional CVD in
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lieu of excise duty and the same is specified in the firstschedule of
Central Excise Tariff Act. Therefore, whenever CVD is paid, itflows from
the Central Excise Tariff Act and not from the Customs Tariff Act
and is not as per the duty specified in the Customs Tariff Act.
Therefore, theentire basis of the interpretation made by the
Adjudicating Authorityregarding levy of CVD is erroneous and on that
basis, the case of thedepartment does not sustain. A very identical
issue has come up in variouscases before this Tribunal and this
Tribunal has taken consistent view thatCenvat credit in respect of 2%
concessional CVD paid on Coal is admissible.The direct judgment on
the issue which considered various earlier decisionsis reproduced
below:-
Hindustan Zinc Limited vs. Commissioner of CGST, Udaipur -
FINALORDER No. 50855-50856 / 2020
1to8.....................
"9. It is not in dispute that both Hindustan Zinc and Ultratech Cement
paid additional duty of Customs under section 3 (1) of the Customs
TariffAct, after availing the benefit of the Customs Notification dated
March 17,2012 and that they also availed CENVAT credit of the
additional duty ofcustoms so paid under rule 3(1)(vii) of the CENVAT
Credit Rules. Thisavailment of CENVAT credit has been denied to them
for the reason thatthe additional duty of customs paid @ 2% was not
the duty of excise asspecified in the Excise Tariff Act and so CENVAT
credit of the additionalduty of customs paid under the Customs
Notification dated March 17,2012 have been wrongly availed.
10. It would, therefore, be appropriate to reproduce the relevant
portion of the show cause notice issued by the Department to
HindustanZinc, and the same is reproduced below:
11. "Whereas, from the above, it transpires that the Cenvat credit on
the coal imported by the assessee is available to the manufacturer
under CenvatCredit Rules, 2004 subject to the satisfaction of the
conditions laid in Rule 3of the Cenvat Credit Rules, 2004. The rule
3(1)(i) of Cenvat Credit Rules,2004 speaks that the Cenvat Credit of
duty of excise as specified in the first schedule to the Central Excise
Tariff Act, 1985 read with any Notificationissued under the Central
Excise Act, 1944 is available to the assessee.Further, from the legal
provisions as contained in Rule 3(1)(vii) of the Cenvat Credit Rules,
2004, it transpires that the assessee is eligible to take Cenvat Credit of
the additional duty leviable under Section 3 of the Customs Tariff Act,
1975 equivalent to the duty of excise specified under clauses (i),
(ii),(viii), (iv), (v), (vi), (vii) and (viia) of the Rule 3 ibid. The duty of
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excise onthe coal imported by the assessee as specified in the first
schedule to the Central Excise Tariff Act, 1985 is 6% and the effective
rate is 1%or2% vide Notification No. 12/2012-CE dated 17.03.2012,
as amended, subject to thecondition stated therein. In this case, 2%
Additional Duty on imported steam coal/bituminous coal as per
Notification No. 12/2012-Cus dated 17.03.2012 as amended by
Notification No. 12/2013-Cus dated 01.03.2013 has been paidby the
assessee. Further, it is found that the said duty of 2% is not
specifiedunder Central Excise Tariff Act, 1985 read with any
notification issued under Central Excise Act, 1944 or rules made
thereunder,therefore the credit of said duty of 2% paid as Additional
Duty of customs does not appear to beadmissible to them.
12. From the above, it appears that the assessee has wrongly availed
totalCenvat credit amounting to Rs. 2,75,97,106/- (As per Annexure
„A‟) incontravention of the provisions of Rule 3 of Cenvat Credit Rules,
2004. Thesaid wrongly availed Cenvat credit, which was otherwise not
admissible tothem, is liable to be recovered from the assessee along
with interest under rule 14 of Cenvat Credit Rules, 2004 read with
Section11A(4)and Section11AA of the Central Excise Act, 1944 and
Section 174 of the Central Goods and Service Tax Act, 2017."
11. The Commissioner has, by the impugned order, not accepted the
explanation offered by Hindustan Zinc for the following reasons:
25. "The notices have basically contended that they rightly availed
Cenvatcredit of the additional duty of customs paid @ 2% in terms of
S. No. 122A or123 of Notfn. No. 12/2012- Customs dated March 17,
2012, as amended by Notfn. No. 12/2013-Cus dated March 1,2013, as
there is no such restriction or barring of credit in rule 3(1)(vii) similar
to the restriction or barring in rule3(1)(i)(b) of CCR, 2004. Their
contention is that they have taken credit of CVD as applicable under
S.No.122A or 123 of 12/2012-Customs dated 17.12.2012 and not S.
No. 67 of notification 12/2012-CE dated 17.03.2012. I do not agree
with their contention because of the specific wording of theclause (i)
and (vii) of sub rule 3(1) of CCR, 2004.
From the perusal of the said sub rule it is clear that credit of the CVD
paid by assessee is admissible as Cenvat credit. However, such right to
availment of credit is no unfettered. The said credit available is
equivalent to the duty ofExcise specified under clauses (i), (ii), (viii),
(iv), (v), (vi), (vii) and (via). Thewording of this clause clearly specifies
that it allows the credit only of theadditional duty leviable under
section 3 of the Customs Tariff Act, equivalentto the duty of Excise
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specified under clauses (i), (ii), (viii), (iv), (v),(vi), (vii) and (via).
Clause (vii) is not independent of clause(i) and thus the proviso
provided under clause (i) is also applicable to credit of CVD under
clause (vii). If there was any other intention of Legislature they would
nothave specifically mentioned "equivalent to the duty of Excise
specifiedunder clauses (i), (ii), (viii), (iv), (v), (vi), (vii) and (via)".
Thus, the notices are not legible to avail the credit of CVD equivalent
to duty of excise if it is not eligible in clause (i)Any other meaning
would be unfair for the local coal producers vis a vis imported coal, as
if stand taken by notices is accepted, credit would not beavailable on
indigenously procured coal but would be available on imported coal.
This could never be the intention of legislature and therefore I do
notfind any substance or basis in the contention of the notices"
12. It would be appropriate to reproduce rule 3 of the CENVAT Credit
Rules and it is as follows:
"RULE 3. CENVAT credit- (1) A manufacturer or producer of final
productsor a provider of output service shall be allowed to take credit
(hereinafterreferred 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
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of the Finance Act, 2001 (14 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 of2007);
(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 FirstSchedule 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 rule3 of the CENVAT Credit Rules. It is for this reason that the conditionsspecified in rule 3(1)(i) have also been imported into rule 3 (1)(vii) of theCENVAT Credit Rules. In the first instance, Hindustan Zinc had not paidduty of excise specified in the First Schedule of the Excise Tariff Act, nor ithad availed the benefit of the Central Excise Notification dated March 1,2011 or that specified in serial numbers 67 and 128 in respect of whichthe benefit of an exemption under Central Excise Notification dated March17, 2012 had been availed. In fact, Hindustan Zinc had paid additionalduty of customs by availing the benefit under serial number 122A/123 ofthe Customs Notification dated March 17, 2012. It is because of thismisreading of rule 3(1) of the CENVAT Credit Rules that led theCommissioner to commit an error.
15. The Regional Advisory Committee of Hyderabad Zone, in its meetingheld on February 9, 2015 considered this very issue at point No. 1 andconcluded that CENVAT credit of additional duty of customs paid onimported goods under Customs Notification dated March 17,
8|Page E/12102/2019, E/10510/2020, E/10545/2019 2013 (andnot under Central Excise Notification) is available for credit. The relevantportion of the minutes is reproduced below:
"MINUTES OF THE MEETING OF THE REGIONAL ADVISORY COMMITTEE, HYDERABAD ZONE HELD ON FEBRUARY 09, 2015. Point No. 1 - Credit on imported coal:-Many manufactures are importing steam coal on payment of duties. As perCustoms Notification No. 12/2012-Cus. They are availing concessional CVD @2%. Audit is of the view that since CVD has been paid @ 2% on importedcoal, the credit under Cenvat Credit Rules is not available. Audit is taking aview that CVD in lieu of Excise duty and if 2% duty has been paid on importsthe credit is not admissible because a manufacturer who is procuring coal domestically where excise duty has been paid @ 2%, the credit is notavailable. Board has issued a circular No.41/2013-Cus. dated 21.10.2013 where it has been clarified that 2% of CVD is "general applied" rate and therefore it isindustry‟s view that credit of CVD is available as per rule 3(1) (vii) of CENVATcredit rules. Please clarify.
Reply:
Since the subject goods were levied at reduced rate of 2% CVD on theirimportation in terms of section 3 of Customs Tariff Act, 1975 read withNotification issued therein i.e under Notification No. 12/2012-Cus. datedMarch 17, 2013 (and not under Notification No. 1/2011 CE) which was notexcluded from the purview of Rule 3 of CENVAT credit rules, 2004, it appearsthat the CENVAT credit of CVD paid on imported coal (i.e. 2% adv.) underNotification 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 customshas been paid after taking into consideration the Customs Notificationdated March 17, 2012, there would be no bar for availment of CENVATcredit in terms of rule 3(vii) of the CENVAT Credit Rules. The relevantparagraph of the decision is reproduced below:
"5 On careful consideration of the submissions made by both the sides, I findthat the sole reason to deny Cenvat credit to the appellant is that theauthorities below have taken into considerationNotificationNo.12/2012-CE.,dated 17-3-2012. The authorities below have not considering the NotificationNo. 12/2012- Cus., dated 17-3-2012. If same is taken into consideration andduty paid under the said notification, there is no bar for availment of cenvat credit in terms of Rule 3 (vii) of Cenvat Credit Rules, 2004. Therefore,
9|Page E/12102/2019, E/10510/2020, E/10545/2019 I holdthat authorities below have applied wrong provision to deny Cenvat credit tothe appellant. Therefore, Cenvat credit cannot be denied to the appellant. Inthat circumstance, I hold that the appellant has correctly availed the Cenvatcredit of CVD paid on imported coal in terms of Rule 3(7) of Cenvat CreditRules, 2004. Further, I find that the show cause notice has been issued byinvoking extended period of limitation. As the Revenue itself has appliedwrong provisions of law, therefore, the extended period of limitation is notinvokable. In that circumstance, the impugned order is set aside."
17. This decision of the Tribunal was subsequently followed by the Tribunal in Jaypee Sidhi Cement Plant and the relevant portion of the decision is reproduced below:
"4. It is submitted on behalf of the appellant that adjudicating authority below has wrongly made applicable the Notification No. 12/2012-C.E., dated17-3-2012 to the facts and circumstances on a wrong presumption that the levy of CVD in dispute is since equal to the Excise duty leviable on the similargoods and manufactured in India, that the benefit of Customs Notification No.12/12 has wrongly been denied vide Order. Learned Counsel has reliedupon the decision of this Tribunal in the case of M/s. HindalcoIndustries Ltd. vs. GST, Bhopal as was pronounced in Appeal No.E/50179/2018-SM vide Final Order No. 50876/2018, dated 8-3-2018 [2018(363) E.L.T. 1085 (Tri.-Del.)]. Reliance has also been placed on anotherdecision of the Tribunal in the case of Asahi Songwon Colors Ltd. v. CCE & ST,Vadodara Appeal No. E/10635/2017-SM vide Final Order No. A/11585/2018(Ahmd.),dated 9-7-2018. Therefore, the order in challenge is prayed to beset aside and appeal is prayed to be allowed.
5. Learned Departmental Representative justified the orders.
6. After hearing both the parties and perusing the record, we are of theopinion as follows:
It is admitted that the appellants have imported coal consequent thereto theyhave paid 1%/2% on CVD in addition to Basic customs duty. The CVD hasbeen paid at the said exempted rate taking the benefit of Sl. No. 123 ofCustoms Notification No. 12/2012-Cus., dated 17-3-2012. It is apparent fromthe order in challenge that Department has denied the payment of CVD onexempted rate and the availment of 10 | P a g e E/12102/2019, E/10510/2020, E/10545/2019 Cenvat credit thereupon relying upon theS. 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.
TheCondition No. 25 of Excise notification which denies availment of Cenvatcredit on imports of coal manufactured by the supplier of coal, as has beentaken the basis in the order-in-original, shall therefore be applicable fordomestically manufactured goods only and not on the imported coal. Perusalof Excise Notification No. 67 further reveals that no such condition isapplicable in case of import of coal.
8. The narrow compass of the adjudication, therefore, remains as to whetherunder 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 CVDpaid. The Cenvat credit is applicable as per Rule 3(1) of the Cenvat CreditRules, 2004. Clause 7 thereof entitles the appellants to avail the Cenvat creditin the given circumstances.The said Rule itself clarifies that the Cenvat credit of duty of excise isnot allowed to be taken when paid on any goods specified under S.Nos. 67 and 128 of Excise Notification No. 12/2012, dated 17-3-2012.Admittedly, the notification relied upon by the department fordenying the impugned benefit to the appellant is Customs NotificationNo. 12/2012, dated 17-3-2012. The restriction of Rule 3 is notapplicable to the said notification. Above all, the Hon‟ble Supreme Courtin the case of SRF Ltd. v. CC Chennai (2015 (318) E.L.T. 607 (S.C.)) has heldthat Excise Notification No. 12/2012 is applicable only in respect of anydigged or manufactured coal and not in respect of imported coal. The importwhereof is allowed to have exempted rate of CVD vide Customs NotificationNo. 12/2012-Cus.
9. In view of the entire above discussion, we are of the firm opinion that theadjudicating authority has committed a legal error while denying the benefitof reduced CVD on imported coal while placing reliance upon the Excisenotification for manufacture of coal." (emphasis supplied)
18. The same view was taken by the Tribunal in Asahi Songwon Colors and the relevant paragraph is reproduced below:
"From the above Rule, it is observed that even if any duty is paid by availingexemption Notification No. 12.2012-CE dated 17.03.2012, the same will notbe available as Cenvat credit for the user of the goods. In 11 | P a g e E/12102/2019, E/10510/2020, E/10545/2019 the present case,admittedly, the appellant have imported Coal and CVD of 2% isleviable in terms of Customs Notification No. 12/2012- Cus. There isno restriction provided in Rule 3 as regards duty paid under Customsnotification. This restriction is applicable only in case of indigenousgoods on which the excise duty @ 2% was paid availing NotificationNo. 12/2012-CE, which is not a case here. Therefore, the appellant isentitled for Cenvat credit in respect of CVD paid under Notification No.12/2012-Cus. Moreover, since the Notification No. 12/2012-CE is applicableonly in respect of indigenously manufactured coal and not in respect theimported coal as held by the Hon‟ble Supreme Court in the case SRF Limitedvs. CC, Chennai- 2015 (318) ELT 607 (SC). Therefore, even if the importerwants to avail the exemption of Notification No. 12/2012-CE for payment ofCVD, the same will not be available to the importer. Therefore, in any case, inthe case of import the Notification No. 12/2012-CE is not relevant."
"From the above Rule, it is observed that even if any duty is paid by availingexemption Notification No. 12.2012-CE dated 17.03.2012, the same will notbe available as Cenvat credit for the user of the goods. In the present case,admittedly, the appellant have imported Coal and CVD of 2% isleviable in terms of Customs Notification No. 12/2012- Cus. There isno restriction provided in Rule 3 as regards duty paid under Customsnotification. This restriction is applicable only in case of indigenousgoods on which the excise duty @ 2% was paid availing NotificationNo. 12/2012-CE, which is not a case here. Therefore, the appellant isentitled for Cenvat credit in respect of CVD paid under Notification No.12/2012-Cus. Moreover, since the Notification No. 12/2012-CE is applicableonly in respect of indigenously manufactured coal and not in respect theimported coal as held by the Hob‟ble Supreme Court in the case SRF Limitedvs. CC, Chennai- 2015 (318) ELT 607 (SC). Therefore, even if the importerwants to avail the exemption of Notification No. 12/2012-CE for payment ofCVD, the same will not be available to the importer. Therefore, in any case, inthe case of import the Notification No. 12/2012-CE is not relevant."
19. Learned Authorized Representative of the Department has, however, placed reliance upon the decision of the Gujarat High Court inLonsenkiri 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 thatthe High Court held that because of the condition set out in proviso 12 | P a g e E/12102/2019, E/10510/2020, E/10545/2019
(b) ofrule 3(1)(i) of the CENVAT Credit Rules that the appellant would not beentitled to avail CENVAT credit. The relevant portion of the judgment ofGujarat High Court is reproduced below:
"2. The appellant imports coal on which ordinarily countervailing duty in thenature of excise duty would be payable. However, by virtue of notifications 1of 2011 dated 01.03.2011 and Sr. No. 67 and 128 of exemption notification12 of 2012 dated 17.03.2012, the assessee would either pay duty at thereduced rate or Nil rate of duty. In this context, the question of allowing theassessee to claim CENVAT credit arose. The Revenue authorities and theTribunal 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 said exemption notifications, CENVAT credit would not be allowable. It isthis view which the assessee has challenged before us.
********
3. It is not in dispute that the assessee has availed of the benefit ofexemption notification 1 of 2011 and also the benefits under Sr. 67 and 128of exemption notification 12 of 2012. In that view of the matter, the abovenoted proviso of the Rules, would disentitle the assessee from claimingCENVAT credit. Counsel for the assessee however submitted that this provisorefers to CENVAT credit of "such duty of excise". In the present case, whatthe assessee has paid was the countervailing duty. The same may have been computed in terms of excise duty payable on local manufacturers,nevertheless, the same cannot be treated as duty of excise per se. Hehowever candidly agreed that facility for getting CENVAT credit in the case ofthe present assessee flows from rule 3 of the Rules. As per sub-rule (1) of rule 3, a manufacturer or producer of a final product or a provider of output service would be allowed to take the CENVAT credit on the duty of excises pecified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act. Sub rule (1) rule 3 which gives the concession of availment of CENVAT credit of the duty paid, also uses the same expression "duty of excise" as is used in the proviso which restricts or limits the right of availmentof such facility under certain circumstances. The expression "duty of excise"
used in clause (i) of sub-rule (1) of rule 3 and the above noted proviso to thesaid rule, must receive same interpretation. The term "duty of excise" cannothave different connotations for the purpose of sub-rule (1) of rule 3 and forthe purpose of proviso to the rule 3. Thus, if we accept the contention of the counsel for the assessee that the countervailing duty would not be included inthe expression "duty of 13 | P a g e E/12102/2019, E/10510/2020, E/10545/2019 excise" for the purpose of the said rule, theassessee‟s very foundation of claiming the benefit of CENVAT credit woulddisappear.
21. This decision of the Gujarat High Court in Lonsenkiri Chemicals Industries was also distinguished by the Tribunal in Aarti Industries Limited and the relevant portion is reproduced below:
"As regard, the judgment cited by the Ld. AR in the case of LonsenkiriChemicals Industries (supra), I find that in the said case Cenvat Credit wasavailed on the CVD paid under the Notification No. 12/12-CE which wasbarred 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 CVDpaid under Notification No. 12/12-Cus., therefore, the judgment of Hon'bleHigh Court in Lonsenkiri Chemicals Industries (supra) is not applicable to thefacts of the present case."
22. The Commissioner, therefore, committed an illegality in denying thebenefit 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. TheCommissioner (Appeals) also found that the judgment of the Gujarat HighCourt in Lonsenkiri Chemicals Industries would not be applicable tothe facts of the case and in this connection placed reliance on the decisionof the Tribunal in Aarti Industries Limited.
24. For the reasons also discussed above, there is no error in the order passed the Commissioner (Appeals) in the matter of Ultratech Cement.
25. Thus, for all the reasons stated above, Excise Appeal No. 52928 of 2019 filed by Hindustan Zinc is allowed and the order dated September24, 2019 passed by the Commissioner is set aside. Excise Appeal No.52774 of 2019 filed by the Commissioner is dismissed."
7. The above decision of the Tribunal has considered various decisions given by the different benches and also distinguished the decisions reliedupon by the Revenue and concluded that the appellant is entitled 14 | P a g e E/12102/2019, E/10510/2020, E/10545/2019 for Cenvatcredit in respect of 2% CVD paid under Notification No. 12/2012-Cus.
8. On the issue of limitation, we find that the issue involved is purely ofinterpretation of Cenvat Credit Rules, levy of CVD in terms of Customs TariffAct. It is also the fact that on identical issue many cases were made out bythe department across the country in respect of different assessees whichclearly shows that the issue involved is of interpretation of law. In thissituation, malafide intention cannot be attributed to the appellant. The appellant have been declaring availment of Cenvat credit in respect of 2% CVD and the same were reflected in monthly ER-1 returns. Therefore, thereis absolutely no suppression of facts or mis-declaration etc. on the part ofthe appellant. Accordingly, the demand for extended period is notsustainable on the ground of time-bar also.
9. As per our above discussion and findings, supported by Tribunal‟s decision in the case of Hindustan Zinc Limited (supra) and various decisions referred therein, the appellants are eligible for Cenvat credit inrespect of 2% CVD paid under Notification No. 12/2012-Cus. Accordingly,the impugned orders are set-aside and appeals are allowed withconsequential relief, if any, in accordance with law."
4. In view of the above order the assessees areentitled for cenvat credit in respect of 2% CVD paid under Notification No. 12/2012- Cus in respect of imported coal. Following the aforesaid order we hold that the assesses in the present appeals are entitled for cenvat credit.
5. Accordingly, the appeal of M/s Narayani Coke Pvt. Ltd (E/12102/2019- DB) and M/s Welspun Steel Ltd Steel Ltd (E/10510/2020-DB) are allowed.
Appeal filed by the Revenue in the case of Nayara Energy Ltd (E/10545/2019-DB) is dismissed. Co also stands disposed of.
(Pronounced in the open court on 04.02.2022 ) RAMESH NAIR MEMBER (JUDICIAL) RAJU MEMBER (TECHNICAL) Geeta