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2017 (3) TMI 1402 - AT - Central ExciseRecovery of credit availed on education cess and higher education cess - appellant availed credit of the duty paid in accordance with the formula prescribed u/r 3(7)(a) of CCR 2004, Alleging that inclusion of Education Cess and S&H Education Cess in calculating the eligibility amount of CENVAT Credit, is contrary to the Rule 3(7)(a) of CCR, 2004, SCN was issued - Held that - the issue is no more res integra and is covered by the decision of the Tribunal in the case of Metaclad Industries 2012 (11) TMI 244 - CESTAT MUMBAI , taking into account the amendment to the said Rule 3(7)(a) of CENVAT Credit Rules 2004, by issuance of N/N. .22/2009-CE(NT), dt.07.09.2009, even for the earlier period, held that the appellants are rightly entitled for the credit of all the additional duties of customs paid by the EOU u/s 3 of the CTA even for the period prior to 7-9-2009 - while calculating admissible CENVAT credit u/r 3(7)(a) of CCR, 2004, appellant has correctly factored Education Cess and Higher Education Cess as CVD paid - appeal allowed - decided in favor of assessee.
Issues:
1. Availment of CENVAT Credit on Education Cess and S&H Education Cess. 2. Interpretation of Rule 3(7)(a) of CENVAT Credit Rules 2004. 3. Applicability of Tribunal judgments on CENVAT Credit eligibility. 4. Calculation of admissible CENVAT credit under Rule 3(7)(a). Analysis: 1. The appeal was filed against the Order-in-Original passed by the Commissioner (Appeals) regarding the availing of CENVAT Credit on goods purchased from a 100% EOU. The issue revolved around the inclusion of Education Cess and S&H Education Cess in calculating the CENVAT Credit eligibility amount, which was challenged through a Show Cause Notice for recovery of availed credit. The demand was confirmed with interest and penalty, leading to the present appeal. 2. The Appellant argued that despite availing credit before the amendment of Rule 3(7)(a) of CENVAT Credit Rules 2004, they were entitled to credit on Education Cess and S&H Education Cess even for the earlier period. This argument was supported by various Tribunal judgments, including Emcure Pharmaceuticals Ltd, Metaclad Industries, and others. The Revenue, however, reiterated the findings of the Commissioner (Appeals) in opposition. 3. The Tribunal, after considering the precedents and the amendment to Rule 3(7)(a) by Notification No.22/2009-CE(NT), held that the Appellants were rightfully entitled to the credit of all additional duties of customs paid by the EOU, even for the period before 07-09-2009. The Tribunal emphasized that the clarification in the Rule was for the removal of doubts and not for restricting credit, rejecting the Revenue's contention. The judgments relied upon by the Appellants were deemed applicable to the present case. 4. In a separate judgment, the Tribunal cited Jai Corporations case, where it was observed that CENVAT credit of Cesses was admissible before the amendment as well. The calculation of admissible CENVAT credit under Rule 3(7)(a) correctly factored in Education Cess and Higher Education Cess as part of CVD paid. The Tribunal found no reason not to follow the precedents and set aside the impugned order, allowing the appeal with consequential relief as per law.
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