2026-VIL-1226-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - CENVAT credit on Countervailing duty paid at concessional rate - Eligibility based on nature of duty not rate of levy - Appellant imported steam coal and sought to avail CENVAT credit on CVD paid at concessional rates of one percent and two percent under Notification No. 12/2012-Cus dated 17.03.2012 - Revenue denied the credit contending that Central Excise Notification No. 1/2011 exempts central excise duty on steam coal and therefore the additional duty of customs equivalent to such excise duty should not be allowed as credit - Whether CVD paid at concessional rates of one percent or two percent qualifies as additional duty of customs equivalent to duty of excise eligible for CENVAT credit, or whether such credit can be denied on the ground of payment at concessional rate rather than tariff rate – HELD - When more than one Notification is available, the importer is free to choose any notification and no particular notification can be pressed upon the importer. The expression equivalent to duty of excise in Rule 3(1)(vii) of CENVAT Credit Rules refers to the measure or yardstick of levy and not to the quantum or rate at which duty is paid - The countervailing duty paid under Notification No. 12/2012-Cus remains a duty under Section 3 of Customs Tariff Act and is eligible for credit irrespective of the concessional rate at which it is paid; the Rule does not impose any condition that such duty must be paid at the tariff rate or must strictly correspond to the rate of excise duty, reading such condition into the Rule would amount to importing words into the statute which is impermissible – Further, denial of credit on the basis of concessional rate would defeat the very purpose of the CENVAT scheme which is designed to avoid cascading of taxes and ensure seamless flow of credit; circulars and administrative instructions cannot override statutory provisions - The extended period cannot be invoked when the dispute relates to pure interpretation of statute and credit is claimed under bona fide belief of entitlement; accordingly, the demand for disallowance of CENVAT credit and associated penalties are set aside, though a discretionary penalty of approximately ten percent of the credit availed is imposed to meet the interest of justice – The appeal is allowed
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