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2022 (10) TMI 285 - AT - Central ExciseCENVAT Credit - Clean Energy Cess - levied under Section 83 of Finance Act, 2010 read with Notification No.2/2010-CEC dated 22.06.2010 read with Clean Energy Cess Rules, 2016 - effect of discontinuation of Clean Energy Cess and introduction of a new Cess in the name of Clean Environment Cess w.e.f. 14.05.2016 vide Section 235 of Finance Act of 2016 - denial of credit on the ground that Clean Energy Cess was not specified in Rule 3 (1) of the Cenvat Credit Rules, 2004 - HELD THAT:- A plain reading of Rule 3 of CCR, 2004 shows that it did not provide for Cenvat credit of every duty of excise and cess but only of some, and this list does not include CEC imposed vide Finance Act, 2010. It is the case of the assessee that since CEC is also a form of excise, they are entitled to Cenvat credit even in the absence of an explicit provision under Rule 3 of CCR, 2004 - fiscal statutes must be interpreted strictly as per the letter of word and not the spirit of the law, ignoring any amount of hardship and eschewing any equity in taxation. However, in the event of ambiguity in taxation liability, statute, the benefit should go to the assessee. From a plain reading of Rule 3 of CCR, 2004, there are no ambiguity. 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 etc. 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 Credit under CCR, 2004, we will be doing a great disservice to the country by replacing the principle of ‘Polluter pays’. Under Clean Energy Cess Rules, the cess has to be deposited through cash /PLA and cannot be deposited through debit to cenvat credit account. Further, proviso to Rule 3(4) of Cenvat Credit Rules specifically debars the payment of Clean Energy Cess by use of cenvat credit taken under Rule 3(1) of Cenvat Credit Rules. Thus, intent of legislature is evident that the Clean Energy Cess has been imposed for collection of cess on the polluting fossil fuels, so as to create additional funds for taking measures to reduce the carbon emissions/pollution. Thus, the intent of legislation is very clear not to allow the cenvat credit of Clean Energy Cess. This is evident as the Central Government is providing for maintaining separate accounts of Clean Energy Cess, to be utilized for specific purposes upon sanction by the Parliament. Appeal dismissed - decided against appellant.
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