Custom, Excise & Service Tax Tribunal
Surat-I vs Aarti Industries Limited on 22 February, 2019
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No. E/11143/2018-SM
[Arising out of OIA-CCESA-SRT-APPEAL-PS-328-2017-18 Dated 11/12/2017 passed by Commissioner
(Appeals) Commissioner of Central Excise, Customs and Service Tax-SURAT-I]
C.C.E. & S.T.-Surat-i Appellant
Vs.
M/s. Aarti Industries Limited Respondent
Represented by:
For Appellant: Mr. K.J.Kinariwala (AR) For Respondent: Mr. Gunjan Shah (Advocate) CORAM:
HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) Date of Hearing/Decision:22.02.2019 Final Order No. A / 10390 /2019 Per: Ramesh Nair The issue involved is that whether the appellants are entiled for Cenvat Credit in respect of CVD paid under Notification No. 12/12-Cus dated 17.03.2012 on import of Coal.
2. Shri. S.N. Gohil, Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He submits that CVD at the rate of 2% paid on import of coal is not admissible as Cenvat Credit, the issue is settled by Hon'ble Gujarat High Court in the case of Lonsenkiri Chemicals Industries-2019 (365) E.L.T. 22 (Guj.).
3. On the other hand, Shri. Gunjan Shah, Ld. Counsel appearing on behalf of the respondent submits that the prohibition of availment of Cenvat credit on CVD paid on coal is only in respect of the duty paid under Central Excise Notification No. 12/12-CE dated 17.02.2012 whereas in the present case the CVD was paid under Notification No. 12/12-Cus dated 17.03.2012 on which there is no bar provided under Rule 3(1) Cenvat Credit Rules, therefore, the Cenvat Credit on the CVD
2|Page E/11143/2018-SM paid on imported coal is admissible. He placed reliance on the Tribunal decisions in the case of M/s. Asahi Songwon colors Limited Vs. CCC & ST., Vadodara-2018 (9) TMI 159-CESTAT Ahmedabad.
4. On careful consideration of the submissions made by both the sides and perusal of the records, I find that issue has already been considered by this Tribunal in the case of M/s. Asahi Songwon Colors Limited (Supra) and passed the following order.
"The brief facts of the case are that the appellant have availed Cenvat credit of 2% CVD lavied in terms of Notification No. 12/2012-Cus dated 17.03.2012, as amended. The case of the department is that, in terms of Rule 3 (1)(i)(b) of Cenvat Credit Rules, the assessee is not entitled for Cenvat credit of the excise duty paid on any goods availing the benefit of exemption Notification No. 12/2012-CE dated 17.03.2012. Accordingly, the appellant have wrongly availed the credit.
2. Shri Paresh M. Dave, ld. Counsel appearing on behalf of the appellant submits that in respect of Coal imported by the appellant, CVD of 2% paid by availing the benefit of Customs Notification No. 12/2012-Cus dated 17.03.2012, which is clear from the bill of entry. The appellant have not availed Central Excise Notification No. 12/2012-CE, therefore, the restriction provided in Rule 3 of Cenvat Credit Rules, is not applicable in the present case as it relates to excise Notification No. 12/2012-CE. Therefore, on the CVD paid under Notification No. 12/2012-Cus, credit is admissible.
3. Ms. Nitina Nagori, ld. Dy. Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. On careful consideration of the submissions made by both the sides, I find that the restriction provided in Rule 3 of Cenvat Credit Rules is as under:-
" Rule 3. (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) ..... ....
(b) specified in serial numbers 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012-CE, dated 17th March, 2012 is availed;]"
From the above Rule, it is observed that even if any duty is paid by availing exemption Notification No. 12.2012-CE dated 17.03.2012, the same will not be available as Cenvat credit for the user of the goods. In
3|Page E/11143/2018-SM the present case, admittedly, the appellant have imported Coal and CVD of 2% is leviable in terms of Customs Notification No. 12/2012-Cus. There is no restriction provided in Rule 3 as regards duty paid under Customs notification. This restriction is applicable only in case of indigenous goods on which the excise duty @ 2% was paid availing Notification No. 12/2012-CE, which is not a case here. Therefore, the appellant is entitled for Cenvat credit in respect of CVD paid under Notification No. 12/2012- Cus. Moreover, since the Notification No. 12/2012-CE is applicable only in respect of indigenously manufactured coal and not in respect the imported coal as held by the Hon'ble Supreme Court in the case SRF Limited vs. CC, Chennai - 2015 (318) ELT 607 (SC). Therefore, even if the importer wants to avail the exemption of Notification No. 12/2012-CE for payment of CVD, the same will not be available to the importer. Therefore, in any case, in the case of import the Notification No. 12/2012-CE is not relevant.
5. In view of the above discussions, the impugned order is set-aside and the appeal is allowed with consequential relief in accordance with the law." From the above decisions it can be seen that the facts and legal issue involved in the present case is absolutely identical to the above case. As regard, the judgment cited by the Ld. AR in the case of Lonsenkiri Chemicals Industries (Supra), I find that in the said case Cenvat Credit was availed on the CVD paid 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 judgment of Hon'ble High Court in Lonsenkiri Chemicals Industries (Supra) is not applicable to the facts of the present case. As per the above discussion, the impugned order is upheld and Revenue's appeal is dismissed.
(Dictated and Pronounced in the open court) (Ramesh Nair) Member (Judicial) Neha