2019 (12) TMI 1059 - AT - Central Excise

Refund of the credit which arouse on the ground of Notification No. 15/2015-CE wherein the education cess and higher education cess was merged with the excise duty - inability to utilise this amount for the discharge of the excise duty in future - N/N. 15/2015-CE dated 01.03.2015 - rejection of refund claim on the ground that there is no such provisions under Rule 5 of the Credit Rules, which stated that a manufacturer who clears a final product or any intermediate product for export without payment of duty under bond or letter of undertaking (LUT) for a service provider, who provides an output service, which is exempted without payment of service tax shall be allowed the refund of Cenvat Credit as per the prescribed formula. HELD THAT - The same situation has come up before Hon ble Supreme Court in case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI 2017 (11) TMI 655 - SUPREME COURT wherein the refund of not utilised credit was permitted to be refunded and Hon ble Supreme Court held that the EC and HEC is part of the excise duty, and therefore, the refund can be granted to him under the provisions of Section 11B of the Central Excise Act. The appellant is entitled for the refund of unutilised credit pertaining to education cess and higher education cess - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of Cenvat Credit under Notification No. 15/2015-CE.

Analysis:
The appeal was filed against the order of the Commissioner (Appeal) upholding the decision of the Adjudicating Authority to reject the refund claim of Cenvat Credit under Notification No. 15/2015-CE. The Appellant, engaged in manufacturing excisable goods, sought refund of education and higher education cess credit under Rule 5 of Cenvat Credit Rules, 2004. The Adjudicating Authority rejected the claim, stating Rule 5 did not cover the situation. The Commissioner Appeal upheld this decision, leading to the present appeal before the Tribunal.

The Appellant argued that post-Notification No. 15/2015-CE, they were unable to utilize the credit and cited legal precedents to support their claim. They referenced the Karnataka High Court case and a Supreme Court case to assert their entitlement to the refund under Section 11 of the Central Excise Act. The Authorized Representative supported the impugned order during the proceedings.

The Tribunal examined the case records and the issue at hand, which revolved around the unutilized credit due to the merger of education cess and higher education cess with excise duty under Notification No. 15/2015-CE. Citing a Supreme Court case, the Tribunal highlighted the government's position that when excise duty is exempted, education cess is also not payable. The Tribunal also referenced a High Court case where a similar refund claim was allowed due to factory closure and exiting the Modvat Scheme.

Based on the legal precedents and the impact of Notification No. 15/2015-CE, the Tribunal concluded that the Appellant was entitled to the refund of unutilized credit related to education cess and higher education cess. The appeal was allowed, granting consequential benefits to the Appellant. The decision was dictated and pronounced in open court by the Member (Technical) of the Tribunal.