2018 (2) TMI 688 - AT - Central Excise

CENVAT credit of Education Cess & Secondary and Higher Education Cess paid on CVD - It appeared to Revenue that in terms of N/N. 13/2012 & 14/2012-Cus both dated 17/03/2012, the said both cesses on CVD were exempted - Held that - there are plethora of decisions which have held that the recipient of inputs cannot do the re-assessment of the goods at the end of input manufacturer. Even if the amount of duty is paid excess on the inputs unless it is refunded the recipient of such inputs is entitled to the entire Cenvat credit of duty paid - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal upholding Order-in-Original denying Cenvat credit for Education Cess & Secondary and Higher Education Cess paid on CVD.

Analysis:
The appellant was engaged in manufacturing goods under Chapter 39 and availed Cenvat credit during 2012-13 & 2013-14. Revenue contended that Education Cess & Secondary and Higher Education Cess on CVD were exempted by Notification No. 13/2012 & 14/2012-Cus, thus the Cenvat credit of ?4,07,696 was not admissible. Show Cause Notice issued on 11/09/2014 proposed to reverse the credit. Order-in-Original dated 28/02/2015 confirmed the demand and penalty. Appeal before Commissioner (Appeals) was rejected, leading to the present appeal before the Tribunal.

The appellant argued that as per Rule 3 of Cenvat Credit Rules, 2004, Cenvat credit cannot be denied if Education Cess & Secondary and Higher Education Cess are paid on CVD. Cited a ruling by Hon’ble High Court of Punjab & Haryana stating that even if duty is paid in excess, Cenvat credit is admissible unless duty paid is refunded.

The Revenue supported the Order-in-Appeal dated 20/08/2015, upholding the denial of Cenvat credit.

The Tribunal, after considering the arguments, referred to previous decisions stating that the recipient of inputs cannot reassess goods at the end of the input manufacturer. Citing the ruling by Hon’ble High Court of Punjab & Haryana, it held that the appellant was entitled to the Cenvat credit of ?4,07,696. The impugned Order-in-Appeal was set aside, and consequently, the Order-in-Original did not survive. The appeal was allowed, granting the appellant consequential relief as per law.