India Cements Ltd. Vs Pr. Commissioner of Central Tax (CESTAT Hyderabad)
The appeal before the CESTAT Hyderabad arose from an order dated 31.05.2018 passed by the Commissioner of Central Tax & Customs (Appeals) pursuant to Show Cause Notices dated 18.04.2016 and 05.05.2017. The principal issue was whether the appellant was entitled to avail CENVAT credit of Countervailing Duty (CVD) paid at concessional rates of 1%/2% on imported steam coal under Notification No. 12/2012-Cus. dated 17.03.2012.
According to the Revenue, Central Excise Notification No. 1/2011 exempted central excise duty on steam coal and, therefore, the appellant was not entitled to CENVAT credit of the CVD paid under the Customs notification. The appellant contended that where more than one notification was available, it was entitled to choose the beneficial notification. It further submitted that the CENVAT Credit Rules, 2004 did not prohibit availment of credit of CVD paid on imported steam coal. The appellant also challenged the penalties, submitting that the duty or CENVAT credit along with interest had been paid before issuance of the show cause notices and that the ingredients for invoking the extended period of limitation were absent.
The Tribunal observed that Notification No. 12/2012-Cus., as amended by Notification No. 12/2013-Cus., prescribed concessional additional customs duty of 1% on steam coal, which the appellant had availed. It held that where multiple notifications are available, the importer is free to choose the notification beneficial to it and no particular notification can be imposed upon the importer. The Tribunal further noted that Rule 3 of the CENVAT Credit Rules permits credit of the additional duty leviable under Section 3 of the Customs Tariff Act, and that the Department had not alleged violation of any conditions governing availment of credit, such as receipt of duty-paid goods in the factory or use in manufacture of excisable goods. It therefore held that the credit could not be denied.
