2011 (11) TMI 802 - HC - Central Excise

CENVAT Credit of Basic Excise Duty or of Education Cess - Held that - The prayer is not at all specific inasmuch as it does not refer to CENVAT Credit of Basic Excise Duty or CENVAT Credit of Education Cess - the writ petition is required to be heard independently and the question that requires to be considered is whether CENVAT Credit of Basic Excise Duty can be utilised for payment of Education Cess - review application allowed.

Summary

Issues:
1. Interpretation of CENVAT credit utilization for specific duties.

Analysis:
The judgment delivered by the High Court of Gauhati involved a review petition arising from a writ petition concerning the utilization of CENVAT credit of Basic Excise Duty for the payment of Education Cess. Initially, the court had believed the case fell under the precedent set in Dharampal Satyapal Ltd. and Prag Bosimi Synthetics Ltd. However, upon closer examination, it was revealed that the issue at hand was distinct. The court noted that the prayer in the writ petition lacked specificity regarding the CENVAT credit in question, leading to the realization that a separate hearing was necessary to determine whether CENVAT Credit of Basic Excise Duty could be used for Education Cess payment.

The primary issue addressed in the original cases of Prag Bosimi Synthetics Ltd. and Dharampal Satyapal Ltd. was the utilization of CENVAT credit for specific duties such as National Calamity Contingency Duty and Education Cess, respectively. The court had previously ruled that CENVAT credit could only be utilized for the payment of the duty it pertained to. For instance, in Prag Bosimi Synthetics Ltd., it was established that CENVAT credit of National Calamity Contingency Duty could only be used for the payment of the same duty. Similarly, in Dharampal Satyapal Ltd., it was decided that CENVAT credit of Education Cess could solely be utilized for Education Cess payment under the CENVAT Rules, 2004.

Ultimately, the court allowed the review application, emphasizing the need for an independent hearing to address the specific question of whether CENVAT Credit of Basic Excise Duty could be employed for the payment of Education Cess. By recalling the previous order and closing the Review Petition, the court ensured a focused examination of the unique issue presented in the case, distinct from the precedents previously relied upon.