Commissioner of Customs Vs JSW Energy Ltd (CESTAT Hyderabad)
The Department filed appeals against a common order dated 25.09.2014 passed by the Commissioner (Appeals) in favour of the respondent, a company engaged in the production of electricity. The respondent had imported non-coking coal under Chapter 2701 1920 of the Customs Tariff Act, 1975 through Krishnapatnam Port for use in electricity generation. While filing the Bills of Entry for import of coal, the respondent paid Basic Customs Duty (BCD), Countervailing Duty (CVD), Clean Energy Cess (CEC), Education Cess (EC) at 2%, and Secondary & Higher Education Cess (SHEC) at 1% calculated on the CVD component.
After payment, the respondent sought refund of the EC and SHEC paid on the CVD, claiming that EC and SHEC were exempt under Notification No. 28/2010-CE and Notification No. 29/2010-CE dated 22.06.2010. The Assistant Commissioner of Customs, Krishnapatnam rejected the refund claims relating to EC and SHEC paid on CVD at the time of import. The total refund claimed across several Orders-in-Original and Bills of Entry amounted to Rs. 33,07,452.
The Department challenged the order of the Commissioner (Appeals), arguing that the decision was not legally correct. It contended that excise duty on coal was introduced for the first time from 01.03.2011, and the CVD imposed under Section 3(1) of the Customs Tariff Act, 1975 on imported coal corresponds to the excise duty payable on similar goods produced in India. The Department further argued that Clean Energy Cess on coal production had already been imposed from 01.07.2010 under Section 83 of the Finance Act, 2010. According to the Department, Notifications 28/2010 and 29/2010 only exempted the collection of EC and SHEC in relation to Clean Energy Cess and could not be applied to exempt EC and SHEC arising from excise duty or the corresponding CVD. It was also argued that the Commissioner (Appeals) had relied on an interim stay order of the Tribunal in the Singareni Collieries case, which should not have been used to support the refund claim.
