2026-VIL-672-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - CENVAT Credit - Availment of CENVAT credit on Countervailing Duty (CVD) paid on imported steam coal at concessional rate under Notification No. 12/2012-Cus dated 17.03.2012, as amended by Notification No. 12/2013-Cus dated 01.03.2013 - Whether CVD paid at concessional rate is 'equivalent to duty of excise' and eligible for credit under Rule 3(1)(vii) of CENVAT Credit Rules, 2004 – HELD - The duty paid on imported steam coal under Section 3(1) of Customs Tariff Act remains eligible for credit irrespective of its nomenclature or the rate at which such duty is paid. The expression 'equivalent to duty of excise' refers to the nature of the levy and not the quantum of duty. Several Tribunal decisions have consistently held that credit cannot be denied merely on account of concessional rate. Notifications prescribing concessional rates do not curtail the statutory right to credit. The Department's contention that concessional CVD is not 'equivalent to duty of excise' is not supported by the statutory text or judicial precedent. Denial of credit on this ground would defeat the purpose of the CENVAT scheme and lead to unintended consequences. The appellant is entitled to avail CENVAT credit on CVD paid under Notification - The impugned Order-in-Original is set aside and the appeal is allowed - Invocation of Extended Period and Penalty - The issue pertains to interpretation of eligibility of CENVAT credit and all relevant particulars were disclosed in statutory records. Mere difference in interpretation of law does not attract extended period. The essential ingredient of wilful suppression with intent to evade duty is absent. The CENVAT credit issue being subject to differing interpretations cannot be said to involve suppression of facts or intent to evade. Penalty under Section 11AC is attracted only when conditions of fraud, suppression or wilful misstatement are satisfied, which are absent in the present case - The invocation of extended period and imposition of penalty are not sustainable.
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