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2012 (11) TMI 817 - HC - Central ExciseChallenge to the levy of excise duty on coal - Petitioner challenged the levying of 5% excise duty with cess on the coal purchased by them from the Coal India Ltd. claiming that levying of such 5% of excise duty is illegal and instead ought to have been levied only 1.03% duty in terms of the Government of India’s Notification No. 1/2011-C.E., dated 1-3-2011. – Held that:- Coal attracts excise duty at the rate of 5% plus cess w.e.f. 1-3-2011. However, the aforesaid excise duty will be exempted and leviable only to the extent of 1% ad valorem plus cess, in the event credit of duty on inputs has not been taken under the provisions of CENVAT Credit Rules, 2004 as also provided under the Government of India’s Notification dated 1-3-2011. Since Coal India Ltd. as a manufacturer of “coal” has decided to avail credit of duty on inputs under the provisions of CENVAT Credit Rules, 2004, the exemption provided under Notification No. 1/2011-C.E, dated 1-3-2011 will not be applicable. Therefore, excise duty at the rate of 5% would be leviable on “coal”. The writ petitioners who are mere traders and not manufacturers, obviously, cannot claim CENVAT Credit under the CENVAT Credit Rules, 2004 and accordingly, has to pay the excise duty on coal at the rate of 5% plus cess on duty as a purchaser. - Decided against the petitioner.
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