The court established that the assessee was eligible to avail CENVAT Credit on imported coal, and the relevant notifications and rules did not restrict the availment of such credit.

JUDGMENT

T.S.Sivagnanam, J. - This appeal filed by the revenue under Section 35G of the Central Excise Act, 1944 is directed against the final order No. 75858/2021 dated 21.12.2021 passed by the Customs Excise and Service Tax, Appellate Tribunal, Kolkata, (tribunal) in Excise Appeal No. 79639 of 2018. The revenue has raised the following substantial questions of law for consideration:

Whether the respondent is eligible to avail Cenvat Credit availed in respect of 1%/2% (concessional rate) Additional Duty of Customs (CVD) paid on imported coal in terms of Notification No. 12/2012-cus dated 17.03.2012 and 12/2013-Cus dated 01.03.2013, in view of restriction for availing Cenvat Credit in terms of the Notification No. 12/2012-CE dated 17.03.2012 (sl. No. 67 and condition no. 25)?

Whether the Learned Tribunal has misdirected itself by allowing the appeal of the respondent without appreciating that if no credit of excise duty at the concessional rate of 1% is available under the proviso to Rule 3(1)(i) of the Cenvat Credit Rules, the credit of CVD at the rate of 1%/2% is also be restricted?

Whether the restricted as prescribed in respect of duty of excise in the Notification No. 1/2011 CE dated 01.03.2011 and in Notification No. 12/2012 CE dated 17.03.2012 read with Rule 3 of the Cenvat Credit Rules, 2004 is applicable to the countervailing duty?

2. We have heard Mr. Vipul Kundalia, learned Senior Standing Counsel assisted by Mr. Tapan Bhanja, learned advocate for the appellants and Mr. Abhratosh Majumder, learned Senior Advocate assisted by Mr. Rahul Dhanuka advocates for the respondent.

3. The respondent assessee 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. Pursuant to such audit, show cause notice dated 03.03.2016 was issued proposing to reverse the CENVAT Credit and also impose penalty and levy interest. The allegation was that the assessee contravened the provisions of the 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 the intent to evade payment of duty.

The assessee objected to the proposal made in the notice by submitting a reply which did not find favour with the adjudicating authority and accordingly the order came to be passed on 10.03.2017 disallowing the CENVAT Credit and order of recovery of the same 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), Siliguri Commissioner (Appeals). The said appeal was partly allowed by order dated 18.06.2018. However, the reverse of the CENVAT Credit, recovery of interest and penalty was affirmed. Aggrieved by such order, the assessee preferred appeal before the learned Tribunal. The tribunal by the impugned order dated 21.12.2021 has allowed the appeal. Aggrieved by the same, the revenue has preferred the present appeal.

4. The question which falls for consideration in this appeal is 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-Cus. dated 17.03.2012 and Notification No. 12/2013-Cus. dated 01.03.2013 and as to 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.

5. The case of the revenue is that Rule 3(1)(i) of the CENVAT Credit Rules, 2004 provides that a manufacture or producer of final products or a provider of taxable service shall be allowed to take credit (CENVAT Credit) of the duty of excise specified in the first schedule to the Excise Tariff Act leviable under the Excis