Order Date: 5 September 2022

Facts-

• The Respondent, Shyam Steels Industries Ltd.  is engaged in the manufacture of Sponge Iron, Billet, TMT Bars and the principal inputs used in the manufacture of final products are Pig Iron, Sponge Iron and Scrap. The department conducted an audit for the period 2013-2014.
• The Appellant availed CENVAT Credit in respect of 1 % or 2 % (concessional rate) Additional duty of Customs (CVD) paid on imported coal in terms of Notification No. 12/2012-and 12/2013-Cus
• A show cause notice was issued proposing to reverse the Cenvat Credit on the ground that the Appellant contravened the provisions of Rule 2(a) and 2(k) of the Cenvat Credit Rules 2004, read with Rule 3 and 4 of the CENVAT Credit Rules, 2004 by mis-declaring the goods as inputs and by deliberately suppressing the facts of taking the inadmissible input credit with the intent to evade payment of duty.
• The order passed on 10.03.2017 disallowing the Cenvat Credit and order of recovery of the same was made in terms of the Rule 14 of the said Rules.
• Aggrieved by such order, the assessee preferred appeal before the Commissioner of CGST and Central Excise (Appeal). The said appeal was partly allowed by order dated 18.06.2018. However, the reversal of the Cenvat Credit, recovery of interest and penalty was affirmed. 
• The tribunal by the impugned order dated 21.12.2021 has allowed the appeal. 
• Revenue being aggrieved by the same, the revenue has preferred the present appeal.

Issue-

• Whether the assessee is eligible to avail CENVAT Credit availed in respect of 1 % or 2 % (concessional rate) Additional duty of Customs (CVD) paid on imported coal in terms of Notification No. 12/2012-and 12/2013-Cus
• Whether there is any restriction for availing CENVAT Credit in terms of the said notification particularly as mentioned in Serial No. 67, Condition No. 25?

Order-

• The Division Bench of Hon’ble High Court observed that the Identical issue has been decided in favor of the assessee by the tribunal in M/S HINDALCO INDUSTRIES LTD. APPELLANT VERSUS GST, BHOPAL RESPONDENT, holding that taking into consideration Notification No. 12/2012-Cus there is no bar for availment of Cenvat Credit in terms of the Rule 3(7) where duty paid under Notification No. 12/2012-Cus and Cenvat Credit cannot be denied.
• Further, in the minutes of the meeting of Regional Advisory Committee for Hyderabad zone it was provided that since the goods were levied to reduced rate of 2% CVD on their importation in terms of Section 3 of Customs Tariff Act, 1975 read with Notification issued therein i.e. under Notification No. 12/2012-Cus. Dated 17.03.2013 (and not under Notification No. 1/2011 CE) which was not excluded from the purview of Rule 3 of Cenvat Credit Rules, 2004. It appears that the Cenvat Credit of CVD paid on importer coal (i.e. 2% adv.) under Notification No. 12/2012-Cus. Dated 17.03.2013 is eligible for credit. 
• The Court held that the Tribunal rightly granted relief in favor of the respondent assessee and the order does not suffer from any error warranting interference.
•  The appeal filed by the appellant is dismissed and the substantial questions of law are answered against the revenue.