In Excise Appeal No.10345 of 2021-CESTAT- CESTAT holds Company entitled for cash refund of accumulated and unutilized Cenvat credit of Education Cess and Secondary as well as Higher Education Cess 
Judicial Member- Ramesh Nair [06-02-2023]

 

Read Order: USV PRIVATE LIMITED V. COMMISSIONER OF CENTRAL EXCISE & ST, DAMAN 

Mansimran Kaur

Ahmedabad, February 10, 2023:Regarding the issue of admissibility of Cenvat credit of Education Cess and Secondary and Higher Education Cess, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal has opined that Rule 3 of the Cenvat Credit Rules, 2004 clearly provides the Cenvat credit to be allowed in respect of Education Cess and Secondary and Higher Education Cess.

A Single-Judge Bench of Justice Ramesh Nair allowed the present appeal by observing that the appellant was entitled for cash refund of accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess.

The issue involved in the present case was whether the appellant was  entitled for cash refund against the accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess.

The Counsel appearing on behalf of the appellant submitted that the Revenue was denied refund on two counts, first, the Cenvat credit of Education Cess and Secondary and Higher Education Cess was  not admissible and second, the refund was  time-barred. He submitted that this issue was no longer res-integra as various high courts decided the issue in favour of the assessee.

After considering the submissions extensively, the Court noted that the  question to be decided  first was whether the appellant was  entitled for the refund of Cenvat credit of education cess and higher education cess and consequently entitled for cash refund in case if unable to utilize the said Cenvat credit under GST regime and second, whether the refund was  time-barred.

 In view of the same, the Court noted that it was not disputed that the appellant was not in a position to utilize Cenvat credit of Education Cess and Secondary and Higher Education Cess due to introduction of GST with effect from June 1, 2017. 

As regards the admissibility of Cenvat credit of Education Cess and Secondary and Higher Education Cess, Rule 3 of the Cenvat Credit Rules, 2004, clearly provides the Cenvat credit to be allowed in respect of Education Cess and Secondary and Higher Education Cess. 

In pursuance of the above Rule, under clause (vi) and (via), the credit of Education Cess and Secondary and Higher Education Cess is clearly allowed. Therefore, the appellant is legally entitled for Cenvat of Education Secondary and Higher Education Cess. Hence, on this count refund cannot be denied, the Court noted. 

Reference was made to the cases, Ranchi v. Ashok Arc, the High Court of Jharkhand and Slovak India Trading Company Private Limited vs. CCE Bangalore. 

In view of the above, it was observed that the issue is no longer res-integra. Accordingly the appellant was entitled for cash refund of accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess. The impugned order was set-aside and the appeal was accordingly allowed.