CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT No. III Excise Appeal Nos. 41697 and 41698 of 2017 (Arising out of Order-in-Original No. 19&20/2017 (Commissioner-CE) dated 29.03.2017 passed by Commissioner of Central Excise, No. 1, Foulks Compound, Anai Road, Salem – 636

001)

M/s. Seshasayee Paper and Boards Ltd. ...Appellant Pallipalayam, Cauvery RS (PO), Erode – 638 007.

Versus Commissioner of GST and Central Excise ...Respondent Salem Commissionerate, No. 1, Foulks Compound, Anai Road, Salem – 636 001. APPEARANCE:

For the Appellant : Mr. Shiva Kumar G., Advocate For the Respondent : Mr. M. Selvakumar, Authorised Representative CORAM:

HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

FINAL ORDER Nos. 40021-40022 / 2026 DATE OF HEARING : 18.08.2025 DATE OF DECISION : 08.01.2026 Per Mr. VASA SESHAGIRI RAO The present appeals have been filed by M/s.

Seshasayee Paper & Boards Limited (hereinafter referred to as “the Appellant” or “SPB”), assailing Order-in-Original Nos. 19/2017 & 20/2017 both dated 29.03.2017 (hereinafter referred to as “the Impugned Orders”), whereby the Commissioner of Central Excise, Salem confirmed demands of ineligible CENVAT Credit amounting to Rs.2,81,62,387/-, and Rs.90,17,869/- respectively along with interest and equal penalties.

2.1 The dispute pertains to availment of CENVAT credit of Additional Duty of Customs (Countervailing Duty – CVD) paid at the concessional rates of 1% and 2% on imported steam coal during the period April 2012 to May 2015, and June 2015 to January 2016, under Rule 3(1)(vii)

of the CENVAT Credit Rules, 2004.

2.2 The Appellant is a manufacturer of paper and paper boards, classifiable under Chapter 48 of the Central Excise Tariff Act, 1985 and Steam coal is a critical input for generation of power and steam used in the manufacturing process. During the relevant period, the Appellant imported steam coal falling under CTH 2701, paying: Nil Basic Customs Duty, and Additional Duty of Customs (CVD) under Section 3(1) of the Customs Tariff Act, 1975, at: 1% ad valorem up to 28.02.2013, and 2% ad valorem from 01.03.2013 onwards, as prescribed under Customs Notification No. 12/2012-Cus dated 17.03.2012 and Notification No. 12/2013-Cus dated 01.03.2013 respectively.

2.3 The Appellant availed CENVAT credit of the said CVD under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004.and the credit so availed was duly reflected in ER-1 returns. There is no allegation that the imported coal was diverted or used for any purpose other than manufacture.

2.4 The Department took the view that Steam coal attracted concessional excise duty of 1% / 2% domestically under Notification No. 1/2011-CE and 12/2012-CE, subject to the condition of non-availment of CENVAT credit. Since CVD is “equivalent to excise duty”, the same restriction should apply to imported coal. Consequently, CENVAT credit of CVD availed was held as inadmissible.

2.5 Based on this reasoning, the Show Cause Notice59/2015 C.Ex (Commissioner) dated 24.06.2015 was issued invoking the extended period under Section 11A(4) and Statement of Demand 18/2016 dated 22.04.2016 was issued under Section 11A(1) of CEA 1944. After due process of Law, both the SCN and SOD were adjudicated confirming the demands as detailed in Para 1.

3.1 Being aggrieved, the Appellant is before this forum.

3.2 As the present appeals E/416697/17DB and E/41698/17-DB arise out of two Orders-in-Original respectively, both involving an identical and recurring issue, namely whether CENVAT credit of 1% / 2% Additional Duty of Customs (CVD) paid on imported steam coal under Customs Notification No. 12/2012-Cus (as amended) is admissible under Rule 3(1)(vii) of the CENVAT Credit Rules, 2004.Since the issue, facts, statutory provisions and reasoning adopted by the adjudicating authority in both Orders-in-Original are identical, we proceed to decide both appeals by this common order.

4. Mr. Shiva Kumar G, Ld. Advocate, appea