Custom, Excise & Service Tax Tribunal
Asahi Songwon Colors Limited vs Vadodara-I on 1 March, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Excise Appeal No.10955 of 2019
(Arising out of OIA-VAD-EXCUS-001-APP-670-2018-19 dated 29/03/2019 passed by
Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-
VADODARA-I)
Asahi Songwon Colors Limited ........Appellant
Block No 429-432 Ecp Channel
Village Dudhwada Tal Padra
Vadodara, Gujarat
VERSUS
C.C.E. & S.T.-VADODARA-I .......Respondent
1st Floor...Central Excise Building, Race Course Circle, Vadodara, Gujarat-390007 APPEARANCE:
Shri. R. R. Dave, Consultant for the Appellant Shri. G. Kirupanandan, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR Final Order No. A/ 10214 /2022 DATE OF HEARING: 01.03.2022 DATE OF DECISION: 01.03.2022 RAMESH NAIR The issue involved in the present case is that whether the appellant is entitled for Cenvat Credit in respect of CVD paid by availing exemption Notification No. 12/12-Cus dated 17.03.2012.
2. Learned Commissioner (Appeals) has held that in terms of Rule 3 (i) and proviso thereof, the appellant is not entitled for Cenvat Credit. Being aggrieved by the order of the Commissioner (Appeals), the appellant filed the present appeal.
3. Shri. R. R. Dave, Learned Consultant appearing on behalf of the appellant submits that in the present case the CVD was paid by availing exemption Notification No. 12/12-Cus dated 17.03.2012 on which there is no restriction under Rule 3 (i) and proviso thereof, therefore, applying the proviso to Rule 3 (i) Cenvat Credit cannot be disallowed. He submits that the issue is already decided in their own case vide this Tribunal's Final Order No. A/11585/2018 dated 09.07.2018.
2|Page E/10955/2019-SM
4. Shri. G. Kirupanandan, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He placed reliance on the Hon'ble High Court of Gujarat judgment in the case of Lonsenkiri Chemicals Industries Vs. CC & ST, Vadodara-I-2019 (365) ELT 22 (Guj.) and Hon'ble Supreme Court in the case of Thermax Pvt. Ltd. Vs. Collector of Customs- 1992 (61) ELT 352 (S.C.)
5. I have carefully considered the submissions made by both the sides and perused the records. The facts is not under disputes that the appellant have paid the CVD on imported coal in terms of exemption Notification No. 12/12- Cus. The restriction for availing of credit on Excise duty paid is given in Rule 3 (i) which is reproduced below:-
"Rule 3 (i) of CCR, 2004:-
(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,
(a) In respect of which the benefit of an exemption under notification No. 01/2011-CE dated the 1st March, 2011 is availed;
or
(b) Specified in serial number 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012-
CE, dated 17th March, 2012 is availed;]"
5.1 From the above proviso, it is clear that the restriction is provided only in respect of such duty which is paid by availing the exemption Notification No. 01/2011-CE dated 01.03.2011 or under Notification No.12/12-CE dated 17.03.2012. In the present case the CVD was paid by not availing the aforesaid excise notifications but it was paid by availing Customs Notification No. 12/2012-Cus, therefore, the restriction provided in Rule 3 (i) and proviso thereof shall not be applicable to the facts of the present case. The issue is no longer res-Integra as in the appellant's own case this Tribunal has decided the same issue by Final Order No. A/11585/2018 dated 09.07.2017 which is reproduced below:-
3|Page E/10955/2019-SM "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 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."
4|Page E/10955/2019-SM 5.3 As regard, judgment of Lonsenkiri Chemicals Industries (Supra) cited by the Learned Authorized Representative, I find that in that case though the credit was of CVD paid on imported coal but by availing Central Excise Notification No. 01/2011-CE and/or 12/2012-CE whereas in the present case the CVD was admittedly paid by availing Customs exemption Notification No. 12/2012-Cus on which there is no restriction for availing Cenvat Credit. Hence, being on different fact, the judgment in the case of Lonsenkiri Chemicals Industries (Supra is distinguished.
6. As per my above discussion and there support from the decision of the Tribunal the appellant's own case, the impugned order is not sustainable.
7. Accordingly, the same is set aside, the appeal is allowed.
(Dictated and pronounced in the open court) (RAMESH NAIR) MEMBER (JUDICIAL) Prachi