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2020 (4) TMI 379 - AT - Central ExciseCENVAT Credit - Education Cess and Secondary and Higher Education Cess - to be included for the purpose of computing the Cenvat Credit on the input supplied by 100% EOU or not - Sub-rule (7) clause(a) of Cenvat Credit Rules, 2004 - period prior to amendment by Notification No. 22/2009-CE(N.T.) in Rule 3(7) - Whether the appellant on the input service procured from 100% EOU is eligible for Cenvat Credit by applying the formula taking into consideration the Education Cess and Secondary and Higher Education cess also? HELD THAT - This tribunal dealing with the same issue in M/S. JAI CORP. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST., VAPI 2014 (11) TMI 706 - CESTAT AHMEDABAD held that amended rule 3(7)(a) is applicable even before amendment also. The appellant is entitled for the Cenvat Credit in respect of Education Cess and Secondary and Higher Education Cess - However, the Adjudicating Authority has liberty to calculate correctly the amount of the Cenvat Credit after taking into account Education Cess and Secondary and Higher Education Cess as per the formula prescribed in the Rule - Appeal allowed by way of remand.
Issues:
Whether the appellant is eligible for Cenvat Credit on input service procured from 100% EOU by considering Education Cess and Secondary and Higher Education Cess? Whether the amendment Notification No. 22/2009-CE(N.T.) dated 7th September, 2009, which includes Education Cess and Secondary and Higher Education Cess, has retrospective effect? Whether the judgments cited by the appellant regarding retrospective effect of the amendment are applicable? Whether the judgments cited by the revenue regarding non-retrospective effect of the amendment are applicable? Whether the pending appeals before the Supreme Court and Gujarat High Court impact the decision in the present case? Analysis: The issue in the present case revolves around the eligibility of the appellant for Cenvat Credit on input service from 100% EOU, specifically focusing on the inclusion of Education Cess and Secondary and Higher Education Cess. The department contends that as per Rule 3 Sub-rule (7) clause(a) of Cenvat Credit Rules, 2004, these cesses were not included for computing Cenvat Credit, leading to a demand against the appellant. The appellant argues that the amendment Notification No. 22/2009-CE(N.T.) dated 7th September, 2009, included Education Cess and Secondary and Higher Education Cess for Cenvat Credit purposes. Citing judgments like JAI CORP. LTD. and ZABATEX TEXTILES INDIA PVT. LTD., the appellant asserts that the amendment has retrospective effect, allowing them to claim the credit. On the contrary, the revenue contends that the amendment lacks retrospective effect, relying on judgments like BANCO PRODUCTS (INDIA) LTD. and VISHAY COMPONENTS INDIA PVT. LTD. The revenue emphasizes that the period in question predates the amendment, thus disqualifying the appellant from claiming the credit. The tribunal, after considering both arguments, refers to previous judgments like JAI CORP. LTD. and ZABATEX TEXTILES INDIA PVT. LTD., which support the appellant's position. The tribunal concludes that the appellant is entitled to Cenvat Credit on Education Cess and Secondary and Higher Education Cess. However, the Adjudicating Authority is directed to recalculate the credit amount accurately based on the prescribed formula. The tribunal dismisses the revenue's appeals pending before higher courts, emphasizing that the judgments relied upon by the revenue are not applicable to the present case. The decision is made in favor of the appellant, allowing the appeal under the specified terms. In summary, the judgment clarifies the retrospective effect of the amendment regarding Education Cess and Secondary and Higher Education Cess for Cenvat Credit, ultimately ruling in favor of the appellant based on established legal principles and precedents.
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