9911796707
TMI Blog2021 (9) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... otification dated March 1, 2016. 3. The appellant is engaged in the manufacture of zinc and lead concentrates falling under Chapter 26 of the First Schedule to the Central Excise Tariff Act, 1985 [the Excise Tariff Act] and avails facility of CENVAT credit on inputs, capital goods and input services as contemplated under the CENVAT Credit Rules, 2004 [the Credit Rules]. For manufacture of the final products, the appellant consumes power generated from its captive thermal plant wherein steam coal/ steam non-cooking coal, falling under Chapter heading 27.01 of the Customs Tariff Act 1975 [the Customs Tariff Act] is used as input. 4. The appellant, during the relevant period, paid CVD in terms of section 3(1) of the Customs Tariff Act on the importation of steam coal. The applicable entries, as amended under the Excise Notification No. 12/2012-CE dated March 17, 2012 and the Customs Notification No.12/2012-Cus dated March 17, 2012, in terms of which CVD was paid, are as follows: Period Rate of CVD Paid Under Entry No. Notification April 2012 to February 2013 1% 67 Notification No. 12/2012-CE, dated 17.03.2012 1% 123 Notification No. 12/2012-Cus. dated 17.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve units of the appellant for the relevant period and for recovery of the same with interest. The show cause notices were issued on the allegation that for the Financial Years 2012-13, CVD was paid on imported steam coal under Serial No.67 of the Central Excise Notification No. 12/2012-CE. Therefore, in terms of proviso to rule 3(i) of Credit Rules, CENVAT credit was not permissible for such CVD paid. For the period from Financial Years 2013-14 to June 20147, CVD was paid in terms of Serial No.122A/123 of Customs Notification No. 12/2012-Cus. It was alleged that CVD paid @2% was not a duty of excise as specified in the Excise Tariff Act and therefore, CENVAT credit of CVD paid under the Customs Notification No. 12/2012-Cus had been wrongly availed by the appellant. The extended period of limitation was also invoked in the show cause notices. 9. Replies were submitted by the appellant against each of the show cause notices. All the five show cause notices were adjudicated upon by the Commissioner by a common order dated 26.02.2019. The demands made in the show cause notices were confirmed in entirety for the following reasons: a. The condition of no credit availment is under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 April 2012 to July 2016 Aug 2016 to June 2017 11. Shri B.L. Narasimhan, learned counsel appearing for the appellant made the following submissions: (i) CENVAT credit of CVD paid @ 1% / 2% ad valorem has been correctly availed in terms of rule 3(1) (vii) of the Credit Rules. The present case is squarely covered by various decisions of Hon'ble Tribunal, including appellant's own case for subsequent period, in Hindustan Zinc Ltd. vs. The Commissioner, Central Goods and Service Tax Commissionate [2020 (10) TMI 1032 - CESTAT New Delhi]; (ii) The impugned order has relied upon the First Information Report filed by the appellant where it has been alleged by the appellant that it suffered a loss of Rs. 10 crores. Using the same as a basis, demand of CENVAT credit of Rs. 19,39,554/- has been confirmed citing short receipt of inputs. However, no factual enquiry was done by the Department regarding actual quantification of short receipt of inputs. Therefore, demand of CENVAT credit without any factual or evidential basis and by merely relying on the figure mentioned in First Information Report is unsustainable; (iii) The extended period of limitation under section 11A(4) could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared at concessional rate of 2% by virtue of this proviso; (v) The instant case is covered by the decision of Gujarat High Court in Lonsenkiri Chemicals Industries vs. Commissioner of Central Excise Customs and Service Tax, Vadodara-I [2018 (9) TMI 1439- Gujarat High Court]. 13. The submissions advanced by the learned Counsel appearing for the appellant and the learned Authorised Representative appearing for the Department have been considered. 14. In order to appreciate the submissions advanced on behalf of the parties, it would be appropriate to reproduce rule 3 of the Credit Rules and it is as follows: "RULE 3. CENVAT credit- (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: Provided that CENVAT credit of such duty of excise shall not be allowed to be taken when paid on any goods- (a) in respect of which the benefit of an exemption under Notification No. 1/2011-C.E., dated the 1st March, 2011 is availed; or (b) specified in serial numbers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the benefit under serial number 122A/123 of the Customs Notification dated March 17, 2012. It is because of this misreading of rule 3(1) of the Credit Rules that led the Commissioner to commit an error. 17. It needs to be noted at this stage that with regard to the period from April 2012 to February 2013, though the appellant had paid CVD in terms of Excise Notification No. 12/2012 dated March 17, 2012 and availed CENVAT credit, but the CENVAT credit availed was either reversed or additional payment of 5% duty was made while availing CENVAT credit of only 1%. 18. The Regional Advisory Committee of Hyderabad Zone, in its meeting held on February 9, 2015 considered this very issue at point No. 1 and concluded that CENVAT credit of additional duty of customs paid on imported goods under Customs Notification dated March 17, 2013 (and not under Central Excise Notification) is available for credit. The relevant portion of the minutes is reproduced below: "Minutes of the meeting of the regional advisory committee, Hyderabad zone held on February 09, 2015. Point No. 1 - Credit on imported coal:- Many manufactures are importing steam coal on payment of duties. As per Customs No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant has correctly availed the Cenvat credit of CVD paid on imported coal in terms of Rule 3(7) of Cenvat Credit Rules, 2004. Further, I find that the show cause notice has been issued by invoking extended period of limitation. As the Revenue itself has applied wrong provisions of law, therefore, the extended period of limitation is not invokable. In that circumstances, the impugned order is set aside." 20. This decision of the Tribunal was subsequently followed by the Tribunal in Jaypee Sidhi Cement Plant vs. Commr. of CGST, Cus. & C. Ex., Jabalpur [2019 (369) E.L.T. 1673 (Tri.-Del.)], and the relevant portion of the decision is reproduced below: "4. It is submitted on behalf of the appellant that adjudicating authority below has wrongly made applicable the Notification No. 12/2012- C.E., dated 17-3-2012 to the facts and circumstances on a wrong presumption that the levy of CVD in dispute is since equal to the Excise duty leviable on the similar goods and manufactured in India, that the benefit of Customs Notification No. 12/12 has wrongly been denied vide Order. Learned Counsel has relied upon the decision of this Tribunal in the case of M/s. Hindalco Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication relied upon by the department for denying the impugned benefit to the appellant is Customs Notification No. 12/2012, dated 17- 3-2012. The restriction of Rule 3 is not applicable to the said notification. Above all, the Hon'ble Supreme Court in the case of SRF Ltd. v. CC Chennai (2015 (318) E.L.T. 607 (S.C.)) has held that Excise Notification No. 12/2012 is applicable only in respect of any digged or manufactured coal and not in respect of imported coal. The import whereof is allowed to have exempted rate of CVD vide Customs Notification No. 12/2012-Cus. 9. In view of the entire above discussion, we are of the firm opinion that the adjudicating authority has committed a legal error while denying the benefit of reduced CVD on imported coal while placing reliance upon the Excise notification for manufacture of coal." (emphasis supplied) 21. The same view was taken by the Tribunal in Asahi Songwon Colors Limited vs. Commissioner of Central Excise & St., Vadodara [2018 (9) TMI 159 (CESTAT Ahmedabad)], and the relevant paragraph is reproduced below: "From the above Rule, it is observed that even if any duty is paid by availing exemption Notification No. 12.2012-CE dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of excise leviable under the Excise Tariff Act read with any other notification was admissible for CENVAT credit. As the additional duty of customs paid at the rate of 2% was not the duty of excise as specified under the Excise Tariff Act, CENVAT credit of additional duty of customs paid under the Customs Notification dated March 17, 2012 was wrongly availed by Hindustan Zinc. The reply filed by Hindustan Zinc did not find favour of the Commissioner, who by order dated September 24, 2019 confirmed the demand made in a show cause notice in its entirety. 23. The provisions of rule 3 of the Credit Rules and the three decisions rendered by the Tribunal in Hindalco Industries Ltd., Jaypee Sidhi Cement Plant and Asahi Songwon Colors Limited were examined by the Tribunal and after distinguishing the decision of the Gujarat High Court in Lonsenkiri Chemicals Industries, which decision had also subsequently been distinguished by the Tribunal in C.C.E. & S.T.- Surat-I vs. M/s. Aarti Industries Limited [2019 (3) TMI 240 - CESTAT Ahmedabad], the Tribunal concluded that if additional duty of Customs was paid after taking into consideration the Customs Notification dated March 17, 2012, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
