CESTAT allows CENVAT Credit of 2% CVD on Imported Steam Coal

Chettinad Cement Corporation Private Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)

The case of Chettinad Cement Corporation Private Ltd. vs Commissioner of GST & Central Excise (CESTAT Chennai) revolves around the eligibility of the appellant to avail CENVAT credit of 2% Countervailing Duty (CVD) paid on imported steam coal. Here’s a summary of the key points in the order:

Background:

• The appellant is involved in the manufacture of clinker and cement and is registered with the Central Excise department.
• Steam coal, used by the appellant in the generation of steam/electricity for the manufacturing process, attracted central excise duty at the rate of 5% ad valorem from March 1, 2011, as per Notification no.2/2011 CE dated 1/3/2011.
• A concessional rate of 1% ad valorem was available under Notification no.1/2011 – CE dated 1/3/2011 (Sl. No.28), with the condition that CENVAT credit of Central Excise duty on inputs and service tax on input services should not be availed by the appellant.
• The appellant paid 2% CVD on imported coal under Notification 12/2012 – Cus. dated 17/3/2012 and claimed credit for the same.
• The department contended that the appellant was not eligible for the credit based on the restrictions in Notification 12/2012 – CE.

Proceedings: