Custom, Excise & Service Tax Tribunal
Rungta Mines Ltd vs -Jamshedpur Commissionerate on 4 September, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 2
Excise Appeal No. 75011 of 2021
(Arising out of Order-in-Original No. 3/Commissioner/2020 dated 30.09.2020 passed
by the Commissioner of C.G.S.T. & C.X., Jamshedpur, Outer Circle Road, Bistupur,
Jamshedpur)
M/s. Rungta Mines Limited : Appellant
Chaliyama Steel Plant,
Head Office - Rungta House,
Chaibasa, District: West Singhbhum,
Jharkhand - 833 201
VERSUS
Commissioner of C.G.S.T. and Central Excise : Respondent
Outer Circle Road, Bistupur, Jamshedpur,
Jharkhand - 831 001
APPEARANCE:
Shri Kartik Kurmy, Advocate, for the Appellant
Shri Debapriya Sue, Authorized Representative, for the Respondent
CORAM:
HON'BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO. 77394 / 2025
DATE OF HEARING / DECISION: 04.09.2025
ORDER:[PER SHRI K. ANPAZHAKAN] The present appeal has been filed against the Order-in-Original No. 3/Commissioner/2020 dated 30.09.2020 passed by the Ld. Commissioner of C.G.S.T. & C.X., Jamshedpur, Outer Circle Road, Bistupur, Jamshedpur, wherein CENVAT Credit amounting to Rs.4,78,36,929/- has been disallowed under Rule 14 of the CENVAT Credit Rules, 2004, along with the demand of interest. In the said order, penalty equal to the amount of credit disallowed has also been imposed on the appellant under Rule 15(2) of the said Rules, read with Section 11AC of the Central excise Act, 1944.
Page 2 of 18Appeal No.: E/75011/2021-DB
2. The brief facts of the case are that M/s. Rungta Mines Limited (hereinafter referred to as the "appellant") are engaged in the manufacture of Sponge Iron, M.S. Billet and TMT Bars falling under Chapter 72/73 of Central Excise Tariff Act. For manufacture of Sponge Iron, inputs such as Iron Ore, Coal, Dolomite, etc., are used. The appellant procures Coal, domestically as well as outside the territories of India and also from registered importers of Coal and claims CENVAT Credit of CVD paid on Coal treating the same as 'inputs' in terms Rule 2(k) of the erstwhile CENVAT Credit Rules, 2004.
2.1. During the period of June, 2014 to June, 2017, the appellant imported 'Steam Coal' from outside the territory of India on payment of concessional CVD under Section 3 of the Customs Tariff Act, 1975, @2% in terms of Customs Tariff Notification No.12/2012- Cus. (Sl.No.123) dated 17-03-2012 as amended by Customs Tariff Notification No.12/2013-Cus. Dated 01-03-2013.
2.2. The Department conducted audit under EA-2000 for the year 2014-15 and 2015-16 between 28-08- 2017 to 30-08-2017 and on scrutiny of Cenvatable documents, vide Audit observation bearing No. C.No.III (10-A)154/IA/CEX/JSR/Gr-10/2016 dated 08-09-2017, it was observed that the Appellant has purportedly availed CENVAT Credit of additional duty of Customs (CVD) paid @2% on imported coal which is not admissible to them. Under Sl.No.67 of Central Excise Notification No.12/2012-C.E. dated 17-03- 2012, the effective duty on Coal was 1% (later revised to 2% vide Central Excise Tariff Notification No.16/2012-C.E.) subject to condition that no CENVAT Credit was to be taken by the user of such Page 3 of 18 Appeal No.: E/75011/2021-DB goods. Accordingly, the appellant was called upon to reverse CENVAT Credit of CVD of Rs.2,09,40,828/- claimed during 2014-15 & 2015-16, along with interest, under Rule 14 of CENVAT Credit Rules, 2004.
2.3. On the basis of the above said audit objection, a Show Cause Notice dated 03.07.2019 was issued to the appellant alleging that they have purportedly contravened the provisions of Rule 3(1)(i)(a) and Rule 9(5) of the CENVAT Credit Rules, 2004, in as much as they have wrongly availed CENVAT Credit of Rs.4,78,36,929/- during June, 2014 to June, 2017 on "Coal" imported from outside the territory of India and also procured from registered importers, on payment of CVD at the concessional rate of 2% under Central Excise Tariff Notification No.01/2011-CE dated 01.03.2011 as amended by Notification No.16/2012- CE dated 17.03.2012. The appellant was also called upon to show cause as to why penalty should not be imposed upon them under Rule15(2)/Section 11AC of the Act.
2.4. On adjudication, the Ld. Commissioner has passed the impugned Order-in-Original dated 30.09.2020, confirming the demands raised in the notice.
2.5. Aggrieved by the disallowance of the credit along with interest and penalty, the appellant has filed this appeal.
3. The Ld. Counsel appearing on behalf of the appellant submits that in the instant case, undisputedly the concessional rates of CVD of 2% was paid/claimed by the appellant on the imported Coal under Entry Sl.No.123 of Customs Tariff Notification No.12/2012-Cus dated 17-03-2012 as amended by Page 4 of 18 Appeal No.: E/75011/2021-DB Notification No.12/2013-Cus. dated01-03-2013 and not under Central Excise Tariff Notification No.01/2011-C.E. dated 01-03-2011. He contends that the embargo under proviso to Rule 3(1)(i) of the erstwhile CENVAT Credit Rules, 2004, is not attracted concessional rate of CVD paid under Customs Tariff Notification.
3.1. It is his further submission that under Rule 3 of the CENVAT Credit Rules, 2004, the restrictions of availing CENVAT Credit is in respect of concessional rate of Central Excise Duty paid under Central Excise Tariff Notification No.1/2011-C.E. dated 01-03-2011 and under Sl.No.67 of Central Excise Notification No.12/2012-C.E dated 17-03-2012 as amended, which are procured from domestic manufacturer/producers and not in respect of Customs Tariff Notification No.12/2012-Cus dated 17- 03-2012 as amended on payment of concessional rate of CVD @ 2% adv on Coal imported from outside the territory of India/registered importers. Thus, the appellant's submission is that they have not erred in law by claiming CENVAT Credit of CVD paid on imported Coal; they have claimed concessional rate of CVD under Sl. No.123 of Customs Tariff Notification No.12/2012-Cus. dated 17-03-2012 as amended by Customs Tariff Notification No.12/2013-Cus.and not under any Excise Tariff Notification No.1/2011-C.E. dated 01-03-2011 and hence, the conditions of not claiming CENVAT Credit under proviso to Rule 3(1)(i) read with Rule 2(d) of the CENVAT Credit Rules, 2004 has no application to the instant case.
3.2. The Ld. Counsel for the appellant submits that the issue is no longer res integra , as CENVAT Credit has been allowed by Tribunals on the same issue. The Page 5 of 18 Appeal No.: E/75011/2021-DB following decisions have been relied upon in this regard: -
(i) Commissioner of CGST Versus M/s. Shyam Steel Industries Limited reported in 2022 (382) E.L.T. 329 (Cal.);
(ii) Shyam Steel Industries Ltd. Vs. CCE reported in 2022 (382) ELT 366 (Tri.-Kol.);
(iii) Hindustan Zinc Ltd. Vs. CGST reported in 2020-TIOL-1545-CESTAT-DEL;
(iv) CCE Vs. Shree Cement Ltd. reported in 2022-
VIL-547-CESTAT-DEL-CE;
(v) Shree Arihant Tradelines India Pct. Ltd. Vs. CCE reported in 2022-TIOL-37-CESTAT-AHM;
(vi) Chettinad Cements Corporation Pvt. Ltd., Vs. The Commissioner of CGST & Central Excise reported in 2024-VIL-566-CESTAT-CHE-CE;
(vii) Asahi Songwon Colors Ltd. Vs. CCE reported in 2018 (9) TMI 159-CESTAT Ahmedabad;
3.3. Thus, it is the submission of the Ld. Counsel for the appellant that the disallowance of credit, along with interest and penalty imposed, in the impugned order is not sustainable and hence, prayed for setting aside the same.
4. It is the further submission of the Ld. Counsel for the appellant that the entire demand is barred by normal period of limitation. He states that the dispute in the instant case relates to the period from June, 2014 to June, 2017 whereas the Show Cause Notice was issued on dated 03.07.2019 i.e. after the expiry of the normal period of limitation of one year under Section 11A(1) of the Central Excise Act, 1944. It is also pointed out that the dispute in the instant case relates to pure interpretation of the statute and the appellant has claimed CVD credit bona fidely which has been upheld by the Courts/Tribunals.
Page 6 of 18Appeal No.: E/75011/2021-DB 4.1. In support of the above contentions, the appellant relies on the following decisions:
(i) Shree Arihant Tradelines India Pct. Ltd. Vs. CCE reported in 2021 (12) TMI 581-CESTAT-
AHMEDABAD;
(ii) Ugam Chand Bhandari Vs. CCE reported in 2004(167) ELT 491 (SC);
(iii) CCE Vs. Karnataka Agro Chemicals reported in 2008 (227) ELT 12 (SC);
4.1. Accordingly, it is the contention of the appellant that the extended period of limitation cannot be invoked in this case; for the same reason, it is pleaded that the penalty imposed may also be set aside.
5. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order.
6. Heard both sides and perused the appeal records.
7. We find that in this case, the appellant has imported Coal on payment of CVD at the concessional rate of 2% as provided under Entry Sl.No.123 of Customs Tariff Notification No.12/2012-Cus dated 17- 03-2012, as amended by Notification No.12/2013- Cus. Dated 01-03-2013. The appellant has availed the credit of the CVD paid on the imported coal. The department proposed to deny the credit on the ground that Rule 3 of the CENVAT Credit Rules, 2004, imposes restrictions on availment of CENVAT Credit is in respect of concessional rate of Central Excise Duty paid under Central Excise Tariff Notification No.1/2011-C.E. dated 01-03-2011 and under Sl.No.67 of Central Excise Notification No.12/2012- Page 7 of 18 Appeal No.: E/75011/2021-DB C.E dated 17-03-2012, as amended. In this regard, we observe that the said restriction is applicable only when coal is procured from domestic manufacturer/producers and not in respect of imported coal by availing the concessional rate of CVD in terms of Customs Tariff Notification No.12/2012- Cus dated 17-03-2012, as amended, as has been claimed by the appellant in this case. In these facts and circumstances, we hold that the appellant have not erred in law while claiming CENVAT Credit of CVD paid on imported Coal. Thus, the conditions of not claiming CENVAT Credit under proviso to Rule 3(1)(i) read with Rule 2(d) of the CENVAT Credit Rules, 2004 has no application to the instant case.
7.1. We find that the issue is no longer res integra, as, under similar facts and circumstances, CENVAT credit has been allowed by Tribunals and Courts on the issue. It is apt to refer to the decision of the Hon'ble High Court at Calcutta in the case of Commissioner of CGST Versus M/s. Shyam Steel Industries Limited reported in 2022 (382) E.L.T. 329 (Cal.), wherein it has been held as under: -
"5. The case of the revenue is that Rule 3(1)(i) of the Cenvat Credit Rules, 2004 provides that a manufacture or producer of final products or a provider of taxable service shall be allowed to take credit (Cenvat credit) of 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 specified in Serial Nos. 67 and 128 in respect of which the benefit of an exemption under Notification No. 12-2012-C.E., dated 17-3-2012 is availed. It is submitted that the adjudicating authority took note of the dictionary meaning of the word "equivalent" to mean a thing equal to another in value or measure or force or an effect or significance and the word "equivalent"
occurring in sub-rule (vii) of Rule 3 of the Cenvat Page 8 of 18 Appeal No.: E/75011/2021-DB Credit Rules, 2004 would indicate that Countervailing Duty (CVD) is equal to duty of excise in all respects and accordingly all the conditions prevailing on duty of excise is very much applicable to CVD though they are collected under different statutes but are same in respect of their nature and the purpose for levy. Further it is contended that the notifications dated 1-3-2011 and 17-3-2012 read with Rule 3 is applicable to CVD and if any other interpretation is given it will jeopardise the very purpose of imposition of countervailing duty.
6. The Learned Tribunal while allowing the appeal pointed out that there is no restrictions in the notifications dated 17-3-2012 and 1-3-2013 unlike Serial No. 67 of Central Excise Notification No. 12 of 2012, dated 17-3-2012 in so far as the availment of Cenvat credit on coal is concerned. Further it was held that the credit of CVD is available under Rule 3(1)(vii) of the Rules and the proviso to Rule 3(1)(i) restricting credit in case of coal cleared under Excise Notification No. 12/2012, dated 17-3-2012 cannot impliedly be read into when the rate of CVD has not been followed from the excise notification but as generally applied the rate on its opinion. Thus, the Tribunal held that there is no room for any intendment in taxing statutes and they require strict interpretation. Further the Tribunal held that even if generally applied rate of CVD which was 1% up to 28-2-2013 and 2% thereafter under the customs notification and the concessional excise duty read on domestically manufacture goods 1% without Cenvat excise notification where not uniform and in any event the expression "equivalent" appearing in Rule 3(1)(vii) of the Rules for modification of CVD could not be restricted including the tariff rate of excise duty of 6% on the domestically manufacture goods. The Tribunal also referred to one of its decisions in the case of Jaypee Sidhi Cement Plant v. CCGST, Customs and Excise, Jabalpur [2019 (369) E.L.T. 1673].
.....
8. That apart, we find that the Regional Advisory Committee for Hyderabad zone which is the Committee consisting of 10 Members, 5 from the department who are all in the rank of Commissioners/Joint Commissioners and 5 Members representing the industry considered this issue. The question which has arisen in the case on Page 9 of 18 Appeal No.: E/75011/2021-DB hand was subject matter of discussion in Point No. 1 and in the Minutes of the Meeting of the Committee dated 9-2-2015 it was decided as follows :-
Since the subject goods were levied to reduced rate of 2% CVD on their importation in terms of Section 3 of Customs Tariff Act, 1975 read with Notification issued therein i.e. under Notification No. 12/2012-
Cus., dated 17-3-2013 (and not under Notification No. 1/2011-C.E.) which was not excluded from the purview of Rule 3 of Cenvat Credit Rules, 2004. It appears that the Cenvat Credit of CVD paid on importer coal (i.e. 2% adv.) under Notification No. 12/2012-Cus., dated 17-3-2013 is eligible for credit.
9. Identical issue has been decided in favour of the assessee by the Tribunal in Hindalco Industries Limited v. 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 v. M/s. Aarti Industries Limited [2019(3) TMI 240-CESTAT Ahmedabad], M/s. Asahi Songwon Colors Limited v. CCE & ST, Vadodara [2018 (9) TMI 159-CESTAT Ahmedabad], Commissioner of Central Excise, Customs & CGST, Jaipur-I & Ors. v. M/s. Shree Cement Limited [2022 (7) TMI 978-CESTAT New Delhi], SRF Limited v. Commissioner of Customs, Chennai [2015 (318) E.L.T. 607 (S.C.)], and M/s. Tamil Nadu Newsprint & Papers Limited v. 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 or 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.
11. In the result, the appeal fails and is dismissed and the substantial questions of law are answered against the revenue."
Page 10 of 18Appeal No.: E/75011/2021-DB 7.2. The same view has been expressed by the Tribunal at New Delhi in the case of Hindustan Zinc Ltd. Vs. Commissioner of C.G.S.T. reported in 2020- TIOL-1545-CESTAT-DEL. The relevant paragraphs of the said decision 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 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)(1) 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 ....
16. A Division Bench of the Tribunal in Hindalco Industries Ltd. considered this precise issue and held that if additional duty of customs has been paid after taking into consideration the Customs Notification dated March 17, 2012, there would be no bar for availment of CENVAT credit in terms of rule 3(vii) of the CENVAT Credit Rules The relevant paragraph of the decision is reproduced below:
Page 11 of 18Appeal No.: E/75011/2021-DB "5 On careful consideration of the submissions made by both the sides, 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 (vii) 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 law, therefore, the extended period of limitation is not invokable. In that circumstances, 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., dated 17-3-2012 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 similar goods and manufactured in India, that the benefit of Customs Notification No. 12/12 has wrongly been denied vide Order. Learned Counsel has relied upon the decision of this Tribunal In the case of M/s. Hindalco Industries Ltd. vs. GST, Bhopal as was pronounced in Appeal No. E/50179/2018-SM vide Final Order No. 50676/2018, dated 8-3-2018 [2018 (363) ELT. 1085 (Tri.-Del)] Reliance has also been placed on another decision of the Tribunal in the case of Asahi Songwon Colors Ltd. v. CCE & ST, Vadodara Appeal No. E/10635/2017-SM Page 12 of 18 Appeal No.: E/75011/2021-DB vide Final Order No. A/11585/2018 (Ahmd.), dated 9-7-2018. Therefore, the order in challenge is prayed to be set 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 the opinion as follows It is admitted that the appellants have imported coal consequent thereto they have paid 1%/2% on CVD in addition to Basic customs duty. The CVD has been paid at the said exempted rate taking the benefit of Sl. No. 123 of Customs Notification No. 12/2012- Cus, dated 17-3-2012.
It is apparent from the order in challenge that Department has denied the payment of CVD on exempted rate and the availment of Cenvat credit thereupon relying upon the S 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. The Condition No 25 of Excise notification which denies availment of Cenvat credit on imports of coal manufactured by the supplier of coal, as has been taken the basis in the order-in-original, shall therefore be applicable for domestically manufactured goods only and not on the imported coal. Perusal of Excise Notification No. 67 further reveals that no such condition is applicable in case of import of coal
8. The narrow compass of the adjudication, therefore, remains as to whether under Customs notification against 6. No. 67 i.e., while importing the coal, the appellants were entitied to avail the Cenvat credit on the amount of CVD paid The Cenvat credit is applicable as per Rule 3(1) of the Cenvat Credit Rules, 2004. Clause 7 thereof entities the appellants to avail the Cenvat credit in the given circumstances Page 13 of 18 Appeal No.: E/75011/2021-DB The said Rule itself clarifies that the Cenvat credit of duty of excise is not 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 for denying the impugned benefit to the appellant is Customs Notification No. 12/2012, dated 17-3-2012. The restriction of Rule 3 is not applicable to the said notification. Above all, the Hon'ble Supreme Court in the case of SRF Ltd. v. CC Chennai (2015 (318) ELT. 607 (SC)) has held that Excise Notification No:
12/2012 is applicable only in respect of any digged or manufactured coal and not in respect of imported coal. The import whereof is allowed to have exempted rate of CVD vide Customs Notification No. 12/2012-Cus
9. In view of the entire above discussion, we are of the firm opinion that the adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification 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 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 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 Page 14 of 18 Appeal No.: E/75011/2021-DB 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
19. Learned Authorized Representative of the Department has, however, placed reliance upon the decision of the Gujarat High Court in Lonsenkiri 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 is for this reason that the High Court held that because of the condition set out in proviso (b) of rule 3(1)(1) of the CENVAT Credit Rules that the appellant would not be entitled to avail CENVAT credit. The relevant portion of the judgment of Gujarat High Court is reproduced below:
2. The appellant imports coal on which ordinarily countervailing duty in the nature of excise duty would be payable. However, by virtue of notifications 1 of 2011 dated 01.03.2011 and Sr. No. 87 and 128 of exemption notification 12 of 2012 dated 17.03.2012, the assessee would either pay duty at the reduced rate or Nil rate of duty in this context, the question of allowing the assessee to claim CENVAT credit arose. The Revenue authorities and the Tribunal 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 is this view which the assessee has challenged before us***
3. It is not in dispute that the assessee has avalled of the benefit of exemption notification 1 of 2011 and also the benefits under Sr. 67 and 128 of exemption notification 12 of 2012. In that view of the Page 15 of 18 Appeal No.: E/75011/2021-DB matter, the above noted proviso of the Rules, would disentitle the assessee from claiming CENVAT credit Counsel for the assessee however submitted that this proviso refers to CENVAT credit of such duty of excise, in the present case, what the assessee has paid was the countervalling 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 perse. He however candidly agreed that facility for getting CENVAT credit in the case of the present assessee flows from rule of the Rules. As per subrule (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 excise specified 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 availment of such facility under certain circumstances.
The expression "duty of excise" used in clause
(i) of subrule (1) of rule 3 and the above noted proviso to the said rule, must receive same interpretation. The term "duty of excise"
cannot have different connotations for the purpose of subrule (1) of rule 3 and for the 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 in the expression "duty of excise" for the purpose of the said rule, the assessee's very foundation of claiming the benefit of CENVAT credit would disappear
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 judgement 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 Page 16 of 18 Appeal No.: E/75011/2021-DB present case in Rule 3(1) there is no bar provided for CVD paid under Notification No. 12/12-Cus., therefore, the judgement of Hon'ble High Court in Lonsenkiri Chemicals Industries (supra) is not applicable to the facts of the present case."
22. The Commissioner, therefore, committed an illegality in denying the benefit of CENVAT credit to Hindustan Zinc."
7.3. A similar issue also came up for consideration before the Tribunal in the case of Commissioner of Central Excise and Customs, Jaipur-I Vs. M/s. Shree Cement Ltd. reported in 2022-VIL-547-CESTAT-DEL- CE, wherein it has been observed as under: -
"6. We have heard learned Authorised Representative appeared for Revenue and learned Counsel for respective assessee/respondents and perused the case records including the written submissions alongwith the case laws placed on record. The assessee herein have availed Cenvat credit, in respect of 1%/2% CVD paid as per Notification No. 12/2012-Cus. The specific bar on which the Revenue is harping upon is provided under Rule 3 (1) (1) (a) (b) ibid for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE but in our view, there is no such bar in respect of CVD paid under Customs Notification No.12/2012-Cus, therefore the assessee/respondents are eligible for Cenvat credit in respect of 1% or 2% CVD, as the case may be, paid under Notification No. 12/2012-Cus. Otherwise also, the issue involved in these appeals is no more res integra and is covered in favour of assessee in view of various decisions of this Tribunal on the identical issue. Recently in Excise Appeal No. 52928 of 2019 titled as M/s Hindustan Zing (sic) Ltd vs. Commissioner, CGST, on similar facts the Tribunal vide final order по. 50855-50856/2020 dated 28/09/2020 2020-VIL-472-CESTAT-DEL-CE held that the manufacturing company was justified in taking the Cenvat credit. The relevant paragraphs of the aforesaid decision is extracted as under:-Page 17 of 18
Appeal No.: E/75011/2021-DB ....
8. Since a consistent view has been taken by this Tribunal in favour of assessee on this issue from time to time, we see no reason to take a contrary view, and therefore we find no merits in the appeals filed by Revenue and the same are hereby dismissed. Early hearing applications are disposed off accordingly."
7.4. We also find the ratio of the following decisions relied upon by the appellant to be squarely applicable to the facts of the present case: -
i. Arihant Tradelines India Pct. Ltd. Vs. CCE reported in 2022-TIOL-37-CESTAT-AHM ii. Chettinad Cements Corporation Pvt. Ltd., Vs. The Commissioner of CGST & Central Excise reported in 2024-VIL-566-CESTAT-CHE-CE iii. Asahi Songwon Colors Ltd. Vs. CCE reported in 2018 (9) TMI 159-CESTAT Ahmedabad.
8. Thus, by following the ratio of the decisions cited supra, we hold that the appellant is eligible to avail the CENVAT Credit of the CVD paid by them on imported coal. Accordingly, we hold that the disallowance of CENVAT Credit to the appellant under section 14 of the CENVAT Credit Rules, 2004, along with the demand of interest, in the impugned order is not sustainable and hence we set aside the same. As there is no irregularity in availing the credit, we are of the opinion that no penalty is imposable on the appellant; hence we also set aside the penalty, equal to the amount of credit disallowed, as imposed on the appellant under Rule 15(2) of the said Rules, read with Section 11AC of the Central excise Act, 1944.
Page 18 of 18Appeal No.: E/75011/2021-DB
9. Regarding invocation of extended period of limitation, we find that the dispute in the instant case relates to pure interpretation of statute and the appellant has claimed CVD under the bona fide belief that they are entitled to avail the credit of CVD paid on the imported coal. Thus, it is evident that there was no intention to avail irregular credit on the part of the appellant. Therefore, we also hold that the extended period cannot be invoked in this case to disallow the credit.
10. In view of the above discussions, we set aside the impugned order and allow the appeal, with consequential relief, if any, as per law.
(Operative part of the order was pronounced in open court) Sd/-
(R. MURALIDHAR) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd