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2025 (4) TMI 880 - AT - Central ExciseCENVAT Credit on the Countervailing Duty (CVD) paid at a reduced rate of 2% on imported steam coal - HELD THAT - The issue as to whether the appellant is eligible to take the credit of 2% CVD paid or the coal is no more res integra - This Bench in the case of Shyam Steel Industries Ltd. v. CCE CGST Bolpur 2021 (12) TMI 956 - CESTAT KOLKATA affirmed by the Hon ble High Court at Calcutta in 2022 (9) TMI 230 - CALCUTTA HIGH COURT has held 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. Circular No. 41 by 2013 CUS dated 21-10-2013 was issued by CBIC on this issue. This Circular clarifies that the CENVAT Credit can be availed on 2% CVD. Conclusion - The appellant is eligible to avail CENVAT Credit on the 2% CVD paid on imported steam coal. Appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment was whether the appellant, M/s Jindal Steel & Power Ltd., was eligible to avail CENVAT Credit on the Countervailing Duty (CVD) paid at a reduced rate of 2% on imported steam coal, as per the Customs Notification No. 12/2012-Cus, despite the conditions set forth in the Excise Notification No. 12/2012-CE that seemingly precluded such credit. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework primarily involved the Customs Notification No. 12/2012-Cus and the Excise Notification No. 12/2012-CE, along with the CENVAT Credit Rules, 2004 (CCR, 2004). The Customs Notification allowed a reduced CVD rate of 2% on imported steam coal, while the Excise Notification stipulated that availing such a reduced rate would preclude the availment of CENVAT Credit. The appellant's eligibility to avail CENVAT Credit was challenged based on these notifications. Several precedents were considered, including decisions in Shyam Steel Industries Ltd. v. CCE & CGST, Bolpur and Hindalco Industries Limited v. GST, Bhopal, which supported the appellant's position that CENVAT Credit could be availed on the reduced CVD rate. Court's interpretation and reasoning: The Tribunal interpreted the legal provisions to determine that the Customs Notification and the corresponding Excise Notification should be read in conjunction with the CENVAT Credit Rules, which did not explicitly bar the availment of CENVAT Credit on the reduced CVD. The Tribunal emphasized that the issue was no longer res integra, meaning it had been settled by previous judicial decisions. Key evidence and findings: The Tribunal considered the appellant's reliance on prior decisions and a CBIC Circular No. 41/2013-CUS, which clarified that CENVAT Credit could be availed on the 2% CVD. The Tribunal found that the Department's stance was inconsistent with its own Circular, which was binding on the Revenue. Application of law to facts: The Tribunal applied the legal principles established in the cited precedents and the CBIC Circular to the facts of the case. It found that the appellant had correctly availed the benefit of the Customs Notification and was entitled to the CENVAT Credit on the reduced CVD paid. Treatment of competing arguments: The Tribunal considered the Department's argument that the appellant's availment of CENVAT Credit was in violation of the Excise Notification and the CCR, 2004. However, it rejected this argument, citing the binding nature of the CBIC Circular and the consistent judicial interpretation of the relevant notifications and rules. Conclusions: The Tribunal concluded that the appellant was eligible to avail CENVAT Credit on the 2% CVD paid on imported steam coal, setting aside the impugned order and allowing the appeal. SIGNIFICANT HOLDINGS The Tribunal held that the issue of CENVAT Credit eligibility on reduced CVD was settled by prior decisions, and the appellant was entitled to such credit. The judgment preserved crucial legal reasoning from past cases, emphasizing that "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." The Tribunal further reinforced the binding nature of the CBIC Circular, which clarified that the reduced CVD did not preclude the availment of CENVAT Credit. The core principle established was that the Customs Notification's provision for a reduced CVD rate did not contain an inherent restriction against claiming CENVAT Credit, and such credit could not be denied based on the Excise Notification's conditions alone. The final determination was in favor of the appellant, granting eligibility for CENVAT Credit on the reduced CVD paid, and the Tribunal allowed the appeal, setting aside the lower authority's order.
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