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2019 (7) TMI 764 - AT - Central ExciseCENVAT Credit - clean energy cess on coal imported by them for use in their factory - It is the case of the appellants that they are entitled to the Cenvat credit on the CEC paid by them while it is the case of the revenue that no Cenvat credit can be granted for the Clean Energy Cess as it is not covered under Rule 3 of CCR, 2004 - HELD THAT:- Although it is now settled that taxing statutes must be literally interpreted, we have also examined the spirit and purpose of levying the CEC. It is evident from Section 83 of Finance Act, 2010 that CEC has been levied on coal to discourage use of the polluting forms of energy and encourage use of cleaner forms of energy. This is based on the principle of ‘Polluter pays’. If the CEC collected by the Government is returned to the assessee through the backdoor in the form of CCR, 2004, we will be doing a great disservice to the country by replacing the principle of ‘Polluter pays’ with ‘Pollution pays’. We will be encouraging use of polluting forms of energy by undoing the very purpose for which CEC has been levied. Where there is a conflict between the constitutional provisions and the laws made or the parent act and the subordinate legislations vires of such act and rules are tested and decided by the Hon’ble Supreme Court and Hon’ble High Courts under Article 32 and 226 of the Constitution of India. The Tribunals (including this Tribunal) are created under Article 323B of the Constitution of India which was inserted by the 42nd amendment to the Constitution - this Tribunal can also examine the vires of the Act and Rules with the condition that the Statute under which this Tribunal was created (Customs Act, 1962) cannot be questioned by this Tribunal. Further, the power of this Tribunal to decide on the vires of the Act or Rules is subject to scrutiny by Division Bench of the High Courts. Thus, the assessees are not entitled to Cenvat credit under Rule 3 of CCR, 2004. Demand of Interest - HELD THAT:- Wherever Cenvat credit has been availed but not utilized, the interest need not be paid but it has to be paid in cases where the Cenvat credit has been taken as well as utilized - demand of interest set aside. Imposition of penalties - HELD THAT:- This is an interpretational issue and it is possible for the assessees to have held a genuine belief that they are entitled for Cenvat credit of CEC and hence have taken Cenvat credit. Therefore, we find that the imposition of penalty under Rule 15 of CCR, 2004 is not justified - Penalty set aside. Appeal allowed in part.
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