Payment of Pre Deposit, Central Excise

[Aitha RajyaLakshmi]

Can Pre - deposit be paid by way of reversal of Cenvat Credit?

Posts / Replies

[KASTURI SETHI]

NOT ALLOWED.

CESTAT Circular F.No. 15/CESTAT/General/2013-14 issued on 28.08.2014 clarifies that if the mandatory deposit of the duty confirmed is made from the CENVAT account, the same can be considered as sufficient.

There are contradictory judgements on the issue. Even Hon'ble Supreme Court in the case of Jayaswal Neco has not accepted above CESTAT circular. Most of the decisions of various courts are in favour of pre-deposit in cash.

[MUKUND THAKKAR]

Endorsed view of Sh,Kasturi Sethiji...

cenvat credit merely used for the payment of excise duty not any other purpose.

[Rajagopalan Ranganathan]

Madam,

Rule 3 (4) of Cenvat Credit Rules, 2204 stipulates that the CENVAT credit may be utilized for payment of -

(a) any duty of excise on any final product; or

(b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or

(c) an amount equal to the CENVAT credit taken on capital goods if such capital goods are removed as such; or

(d) an amount under sub rule (2) of rule 16 of Central Excise Rules, 2002; or

(e) service tax on any output service:

Provided that while paying duty of excise or service tax, as the case may be, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty or tax relating to that month or the quarter, as the case may be:

Provided further that CENVAT credit shall not be utilised for payment of any duty of excise on goods in respect of which the benefit of an exemption under notification No. 1/2011-CE, dated the 1st March, 2011 is availed:

Provided also that the CENVAT credit of the duty, or service tax, paid on the inputs, or input services, used in the manufacture of final products cleared after availing of the exemption under the following notifications of Government of India in the Ministry of Finance (Department of Revenue),-

(i) No. 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated 8th July, 1999];

(ii) No. 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated 8th July, 1999];

(iii) No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001];

(iv) No. 56/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 764(E), dated the 14th November 2002];

(v) No. 57/2002-Central Excise, dated 14th November, 2002 [G.S.R.. 765(E), dated the 14th November, 2002];

(vi) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003]; and

(vii) No. 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R. 717 (E), dated the 9th September, 2003],

shall, respectively, be utilized only for payment of duty on final products, in respect of which exemption under the said respective notifications is availed of.

Provided also that no credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, shall be utilised for payment of service tax on any output service:

Provided also that the CENVAT credit of any duty mentioned in sub-rule (1), other than credit of additional duty of excise leviable under section 85 of Finance Act, 2005 (18 of 2005 ) shall not be utilised for payment of said additional duty of excise on final products

Provided also that the CENVAT credit of any duty specified in sub-rule (1), except the National Calamity Contingent duty in item (v) thereof, shall not be utilized for payment of the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001)

Provided also that the CENVAT credit of any duty specified in sub-rule (1) shall not be utilised for payment of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the Finance Act, 2015 (20 of 2015):]

Provided also that the CENVAT credit of any duty specified in sub-rule (1) shall not be utilized for payment of the Clean Energy Cess leviable under section 83 of the Finance Act, 2010 (14 of 2010)]

Provided also that CENVAT credit shall not be utilised for payment of Infrastructure Cess leviable under sub-section (1) of section 162 of the Finance Act, 2016.

Provided also that the Cenvat credit of any duty specified in sub-rule (1) shall not be utilised for payment of Krishi Kalyan Cess leviable under section 161 of the Finance Act, 2016 (28 of 2016):

Explanation. - CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient.

In the above rule it is nowhere mentioned that cenvat credit can be utilized for making pre-deposit under Section 35F of Central Excise Act, 1944. Therefore you cannot utilize cenvat credit for making pre-deposit.

[Ganeshan Kalyani]

Yes , pre-deposit can be made by cash only.

[YAGAY AND SUN]

What's about this clarification.

F.No.15/CESTAT/General/2013-14

[KASTURI SETHI]

Dear Sir, The Supreme Court has not accepted this CESTAT Order in one case. I have citation of Tax India which is not permitted by TMI here

[YAGAY AND SUN]

There are judgements in either sides.

[Himansu Sha]

Unless ordered by Hon,ble Cestat, the predeposit has to be paid by cash. It is not a duty. Even for refund of predeposit, the detail procedures of refund of duty is not applicable. A simple application will do the purpose