2023 (9) TMI 58 - AT - Central Excise

Utilization of BED utilized for payment of EC and SHEC while availing area based exemption in contravention of Rule 3(7)(b) of the CCR, 2004 - wilful evasion on part of the appellant in payment of EC and SHEC - N/N. 20/2008-CE dated 27.03.2008 - HELD THAT - On going through the decision of the Hon ble Apex Court wherein the appeals have been disposed off in the light of the decision of the Hon ble Apex Court in the case of SRD Nutrients 2017 (11) TMI 655 - SUPREME COURT . In the case of SRD Nutrients the issue is before the Hon ble Apex Court is whether the refund of EC SHEC is available to the assesse paid through PLA availing area based exemption or not, where it was held that appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy - Although the said decision has been examined by the Hon ble Apex Court in the case of Unicorn Industries Vs. Union of India 2019 (12) TMI 286 - SUPREME COURT , which has been disposed off in the light of the decision of the Hon ble Apex Court in the case of SRD Nutrients. The issue whether the BCD can be utilised for payment of EC SHEC was not examined by the Hon ble Apex Court in the case of Hitachi Home 2018 (9) TMI 383 - SC ORDER . Now, the jurisdictional High Court of Guwahati has an occasion to examine the issue in hand in the case of UNION OF INDIA VERSUS KAMAKHYA COSMETICS PHARMACEUTICAL PVT. LTD. 2012 (7) TMI 902 - GAUHATI HIGH COURT , wherein the Hon ble High Court has held there was no bar to utilize Cenvat credit of Basic Excise Duty for payment of Education Cess. Thus, the appellants are entitled to utilise the cenvat credit of BED for payment of EC and SHEC - impugned order set aside - appeal allowed.

Summary

Issues involved: The judgment addresses the issue of utilizing cenvat credit of Basic Excise Duty (BED) for payment of Education Cess (EC) and Secondary & Higher Education Cess (SHEC) under the Cenvat Credit Rules, 2004 while availing area-based exemption.

Excise Appeal No. 78 of 2012:
The Appellant, engaged in manufacturing various products, was eligible for refund under Notification No.32/1999-CE. A show-cause notice was issued for utilizing Cenvat Credit of BED for EC and SHEC. The order was challenged before the Commissioner and subsequently before the Tribunal.

Excise Appeal No.75415 of 2016:
The Appellant availed cenvat credit on input/capital goods and services, along with area-based exemption. A show-cause notice was issued for utilizing BED credit for EC and SHEC. The Tribunal initially allowed the appeal, but the High Court remanded the matter back to the Tribunal for fresh adjudication.

Decision Details:
The issue of utilizing BED for EC and SHEC was examined in various cases, with conflicting decisions. The Counsel argued that EC & SHEC are duties of Excise under the Cenvat Credit Rules, 2004. The Revenue relied on a precedent to support their stance against utilizing BED for EC and SHEC.

Tribunal's Analysis:
The Tribunal considered the conflicting decisions and the interpretation of the Cenvat Credit Rules, 2004. Referring to the decision of the Hon'ble Guwahati High Court, the Tribunal held that appellants are entitled to utilize BED credit for EC and SHEC payments.

Conclusion:
Based on the decision of the Hon'ble Guwahati High Court, the Tribunal set aside the impugned orders and allowed the appeals, granting consequential relief. The judgment was pronounced on 29.08.2023.