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2024 (10) TMI 803 - AT - Central ExciseUtilization of Edu Cess credit and SHE cess lying in balance 01-03-2015 towards payment of Central Excise Duty for the month of June 2017 - recovery with penalty u/s 11AC of the Central Excise Act, 1944 - HELD THAT - The N/N. 12/2015-CE(NT) dated 30.04.2015 amended the Rule 3 (7) (b) of Cenvat Credit Rules. By insertion and following provisos, the notification does not provide that Cenvat credit of Education- cess/ Secondary and Higher Education-cess available with the Appellants as on 28.02.2015 stands lapsed. The said credit is available with the Appellant for utilization of the same for payment of due Central Excise duty as the the rates of Central Excise duty were made inclusive of the leviable Education cess and Secondary and Higher Education cess. The Notification No.12/2015-CE(NT) has been issued amending the Cenvat Credit Rules as to implement the above proposed amendment in the rate of duty as per the Hon ble Finance Minister s Speech - the notification number 12/2015-CE (NT) is totally silent on the issue of accumulated credit of the education cess and higher education cess available with the Appellants as on 01.03.2015, It do not provide that this credit shall lapse, or cannot be used for payment of the excise duty in which these cesses have been subsumed. Appeal allowed.
Issues:
Utilization of Edu Cess credit for payment of Central Excise Duty. Interpretation of Notification No.12/2015-CE(NT) dated 30.04.2015 regarding Cenvat credit. Admissibility of Cenvat credit on Education Cess and Higher Education Cess. Analysis: The judgment involves an appeal against the Order-In-Appeal passed by the Commissioner (Appeals) CGST & Central Excise, Allahabad. The case pertains to the Appellant, engaged in the manufacture of HDPE Woven bags, utilizing Edu Cess credit for Central Excise Duty payment. The audit revealed the utilization of Edu Cess credit from the balance lying as of 01-03-2015 towards duty payment for June 2017. The Order-In-Original confirmed the demand and imposed a penalty under Section 11AC of the Central Excise Act, 1944, which was upheld by the First Appellate Authority, leading to the current appeal before the Tribunal. The main issue revolves around the interpretation of Notification No.12/2015-CE(NT) dated 30.04.2015 concerning the utilization of Cenvat credit on Education Cess and Higher Education Cess for Central Excise duty payment. The Appellant argued citing the 3rd proviso of the notification, contending that the credit utilization should be allowed based on previous judicial decisions. On the other hand, the revenue supported the impugned order and relied on precedents to dismiss the appeal. The Tribunal analyzed the notification, emphasizing that it did not mention the lapse of accumulated credit available with the Appellant as of 01.03.2015, thereby allowing the utilization of such credit for duty payment. The Tribunal's analysis delved into the legislative intent behind the notification, highlighting the amendment to the Cenvat Credit Rules to align with the Finance Minister's proposal to subsume Education Cess and Higher Education Cess into Central Excise duty. The Budget Speech indicated the rounding off of the general rate of Central Excise Duty to 12.5%, inclusive of the cesses. Consequently, the Tribunal interpreted Notification No.12/2015-CE(NT) in a manner consistent with the Finance Minister's objective, allowing the Appellant to utilize the available credit for Central Excise duty payment. As a result, the Tribunal allowed the appeal, providing consequential relief as per law. In conclusion, the judgment clarifies the permissible utilization of Cenvat credit on Education Cess and Higher Education Cess for Central Excise duty payment based on the interpretation of relevant notifications and legislative intent, ultimately ruling in favor of the Appellant and granting relief in line with the law.
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