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2019 (4) TMI 1552 - AT - Central ExciseIrregular utilisation of CENVAT credit lying on balance in Education Cess (EC) and Secondary Higher Education Cess - Revenue is contesting the same on the ground that EC SHEC can be utilised only for discharge of those cesses and not the basic excise duty - HELD THAT - The issue is no more res integra as on an identical issue, writ petition was filed before the Hon ble High Court of Delhi in the case of CELLULAR OPERATORS ASSOCIATION OF INDIA AND OTHERS VERSUS UNION OF INDIA AND ANOTHER 2018 (2) TMI 1264 - DELHI HIGH COURT wherein the Hon ble High Court discarded the same contentions raised by the petitioners therein and held that though the Central Government of India had issued notifications 12/2015-CE(NT) and 22/2015-CE(NT), it cannot be said that CENVAT credit of EC SHEC lying in balance as on 01.03.2015 can be utilised for discharge of basic Central Excise duty for clearances after 01.03.2015. The appellant herein is from a organised sector and was aware of the provisions as to the utilisation of CENVAT credit. It cannot be said that appellant was not aware of the fact that EC and SHEC cannot be utilised for discharge of basic Central Excise duty as on 01.03.2015. Appeal dismissed - decided against appellant.
Issues:
Wrong utilization of CENVAT credit for Education Cess and Secondary & Higher Education Cess post withdrawal of the cesses. Analysis: The appeal was filed against Order-in-Appeal No. GUN-EXCUS-000-APP-225-17-18 dated 12.03.2018. The issue revolved around the incorrect utilization of CENVAT credit remaining in Education Cess (EC) and Secondary & Higher Education Cess (SHEC) as of 01.03.2015. The appellant, a registered entity availing CENVAT credit, had used the credit to pay Central Excise duty on goods until 01.03.2015 when EC & SHEC were eliminated. Despite having a balance of these cesses in their CENVAT register, the appellant used EC for basic excise duty post-01.03.2015, leading to a dispute with the revenue department. The revenue contended that EC & SHEC credits could only be used for their respective cesses, not for basic excise duty. A show cause notice was issued, demands confirmed with penalties under relevant rules, and the first appellate authority upheld the decision. The judge referred to a similar case before the Hon'ble High Court of Delhi, where it was held that CENVAT credit of EC & SHEC from before 01.03.2015 could not be used for basic excise duty post that date. Drawing from this precedent, the judge found that the same principle applied to the current case. The appellant's argument that penalties should be set aside due to an interpretation issue was dismissed. The judge noted that being from an organized sector, the appellant should have been aware of the regulations regarding CENVAT credit utilization, including the restriction on using EC & SHEC for basic excise duty post-01.03.2015. Consequently, the appeal was deemed meritless and rejected. In conclusion, the judgment addressed the issue of incorrect utilization of CENVAT credit for Education Cess and Secondary & Higher Education Cess after their withdrawal. It highlighted the legal precedent set by a previous case and emphasized the appellant's responsibility to comply with regulations despite their interpretation disputes. The decision ultimately upheld the revenue department's stance and rejected the appellant's appeal.
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