Case Law Details
Arihant Tradelinks India Private Limited Vs C.C.E., Kutch (Gandhidham) (CESTAT Ahmedabad)
Conclusion: In present facts of the case, the Hon’ble Tribunal held that limitation period could not be invoked as the issue involved is purely of interpretation of Cenvat Credit Rules, levy of CVD in terms of Customs Tariff Act, therefore malafide intention cannot be attributed to the appellant.
Facts: The brief facts of the case are that the appellants have availed Cenvat credit of CVD paid on input namely, coal of various types either directly imported by the appellant or purchased from other importers. The import documents in respect of such coal indicate that CVD @ 2% was paid in terms of Customs Notification No. 12/2012-Cus dated 17.03.2012 (as amended) and accordingly, appellants have paid CVD @ 2% and availed Cenvat credit thereof. The appellants were issued show cause notices to deny credit, as the appellant has not paid duty at the Central Excise tariff rates and have paid duty less than that, as per Customs Notification No. 12/2012-Cus, appellant were not eligible for Cenvat credit. The Adjudicating Authorities, vide impugned orders confirmed the demand of Cenvat credit availed by the appellant and also imposed equal penalty. Therefore the present appeals filed by the appellants.
After taking into consideration of submissions from both sides, the Hon’ble Tribunal observed that specific bar was provided under Rule 3(1)(i)(a) and (b) for availing Cenvat credit in respect of goods exempted from payment of excise duty under Notification No. 1/2011-CE and 12/2012-CE. However, there is no bar provided in respect of CVD paid under Customs Notification No. 12/2012-Cus. For this reason itself, the Cenvat credit availed by the appellant in respect of CVD cannot be denied. Only on the ground that the appellant have not paid CVD equivalent to the excise duty leviable on the Coal specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via) and applied clause (vii) of Rule 3 of Cenvat Credit Rules. The Revenue‟s contention is incorrect that as per clause (vii) of Rule 3(1) additional duty leviable under Customs Tariff Act is equivalent to duty of excise duty specified under clause (i) of Rule 3(1) is paid.
As per clause (i) of Rule 3(1), the duty of excise specified in the first schedule to the Central Excise Tariff Act, 1985 leviable under the Excise Act. In the present case, there is no dispute that the duty of excise is indeed specified in first schedule of Central Excise Tariff Act, 1985 which is leviable under the Excise Act. It is only by Customs Notification, the concession in rate of duty was provided i.e. @ 2% under Notification No. 12/2012-Cus. Only since the concessional rate is provided under Customs Notification, the nature of excise duty specified in the first schedule to the Central Excise Tariff Act does not get altered. The Adjudicating Authority has ignored the fact that there is not the rate of CVD provided in the Customs Tariff Act and the rate of duty is provided in Central Excise Tariff Act. Therefore, even the 2% which is nothing but a concessional CVD in lieu of excise duty and the same is specified in the first schedule of Central Excise Tariff Act. Therefore, whenever CVD is paid, it flows from the Central Excise Tariff Act and not from the Customs Tariff Act and is not as per the duty specified in the Customs Tariff Act. Therefore, the entire basis of the interpretation made by the Adjudicating Authority regarding levy of CVD is erroneous and on that basis, the case of the department does not sustain.
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