2022 (6) TMI 822 - AT - Service Tax

Refund of unutilized CENVAT credit availed on Education cess, Secondary and Higher Education cess and Krishi Kalyan cess - Time Limitation - section 11B of the Central Excise Act - HELD THAT - The Tribunal in the case of EMAMI CEMENT LIMITED, NU VISTA LIMITED VERSUS COMMISSIONER (APPEALS) , CGST, CENTRAL EXCISE, RAIPUR 2022 (3) TMI 1254 - CESTAT NEW DELHI has held that The appellant is, therefore, clearly entitled to the refund of the balance amount of credit of cess and the decision to the contrary taken by the Commissioner (Appeals) cannot be sustained. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for refund of Education cess, Secondary and Higher Education cess, and Krishi Kalyan cess under CENVAT credit.
2. Interpretation of Section 140 of the CGST Act, 2017 regarding refund eligibility.
3. Application of precedents in similar cases for refund claims.
4. Policy decisions regarding accumulated credit of cess after its phase-out.
5. Comparison of judgments in different cases regarding the refund of cess.

Issue 1: Eligibility for refund of Education cess, Secondary and Higher Education cess, and Krishi Kalyan cess under CENVAT credit:
The appellant, engaged in providing dredging services, filed a refund claim for unutilized CENVAT credit based on a High Court judgment. The original authority and Commissioner (Appeals) rejected the claim, citing Section 140 of the CGST Act, 2017, which excludes cess from refundable duties. The appellant argued citing precedents like Emami Cement Ltd. and Schlumberger Asia Services Ltd., where the Tribunal allowed refund claims for unutilized cess in CENVAT accounts. The Tribunal in Emami Cement Ltd. observed that the appellant was entitled to a refund of the balance amount of cess credit, emphasizing that CENVAT credit is a vested right. Similarly, in Schlumberger Asia Services Ltd., the Tribunal allowed refund claims for all cess. The Tribunal concluded that the rejection of the refund was not justified, setting aside the impugned order and allowing the appeal for refund with consequential reliefs.

Issue 2: Interpretation of Section 140 of the CGST Act, 2017 regarding refund eligibility:
The appellant's claim was rejected based on Section 140 of the CGST Act, 2017, which was interpreted to allow refunds only for eligible duties, excluding cess. However, the appellant argued that the Tribunal's decisions in Emami Cement Ltd. and Schlumberger Asia Services Ltd. supported the refund claims for unutilized cess in CENVAT accounts. The Tribunal held that the appellant was entitled to file the refund claim, setting aside the impugned order and allowing the refund subject to verification of records.

Issue 3: Application of precedents in similar cases for refund claims:
The appellant relied on precedents like Emami Cement Ltd. and Schlumberger Asia Services Ltd., where the Tribunal allowed refund claims for unutilized cess in CENVAT accounts. These cases emphasized that CENVAT credit is a vested right, and the appellant was entitled to the refund of the balance amount of cess credit. The Tribunal concluded that the rejection of the refund was not justified, allowing the appeal for refund with consequential reliefs.

Issue 4: Policy decisions regarding accumulated credit of cess after its phase-out:
The appellant's claim for refund of unutilized cess was supported by Tribunal decisions despite a policy decision not to allow utilization of accumulated cess credit after cess phase-out. The Tribunal found that the policy decision contradicted the decisions of High Courts and the Tribunal, emphasizing that CENVAT credit avail is a vested right. The Tribunal allowed the refund claim, setting aside the impugned order and granting the appeal for refund with consequential reliefs.

Issue 5: Comparison of judgments in different cases regarding the refund of cess:
The Tribunal compared judgments in cases like Emami Cement Ltd., Schlumberger Asia Services Ltd., and M/s Bharat Heavy Electricals Ltd. to determine the eligibility for refund of unutilized cess in CENVAT accounts. The Tribunal found that the decisions supported the appellant's claim for refund, emphasizing that CENVAT credit is a vested right. The Tribunal allowed the refund claim, setting aside the impugned order and granting the appeal for refund with consequential reliefs.