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TMI Blog2022 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... IARY No. 701942022 - - - Dated:- 23-8-2022 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Ms. Priyanka Rathi, Chartered Accountantfor the Appellant Mr. B.K. Jain, Authorised Representative for the Respondent ORDER P. ANJANI KUMAR: M/s Johnson Mathey Chemical India Pvt. Ltd. [1] has filed this appeal against the Order-in-Appeal dated January 25, 2022 passed by the Commissioner (Appeals), Allahabad whereby he rejected the Appeal on the ground that the Appellant had not made the pre deposit as per section 35F of the Central Excise Act, 1944 [2] . 2. The Registry had pointed out two defects in the instant Appeal. One was with respect to non-submission of self-attested copies of order in original and the second was with respect to the mandatory pre-deposit of 10% of disputed duty. The appellant, by letter dated May 13, 2022, clarified that the defect with respect to the attested copies of order in original has been cured. Further, with respect to defect of pre-deposit, it was submitted that there is no defect as requisite pre-deposit of total 10% had already been made. Before the first appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Akshay Steel Works Pvt. Ltd. v. Union of India 2014 (304) E.LT.518 (Jhar.) (2) Hindprakash International Pvt. Ltd. v. Commissioner 2016 (41) S.T.R. 70 (Tribunal) (3) United ChloroParafins v. CCE 2018 (10) G.S.T.L. 501 (Tri.-Kolkata) (4) 6. Learned Chartered Accountant submits that in the present case, as per the GST transition provisions of Section 142(7) of the CGST Act, the present Appeal should be disposed of in accordance with provisions of the erstwhile laws. Consequently, it is submitted that the payment of mandatory pre-deposit using the electronic credit ledger balance should be permitted in line with the position under the erstwhile regime as upheld in various High Court decisions and the Circular no. 15/CESTAT/General/2013-14 dated August 28, 2014 which clarified that credit reversal is a proper mode for payment of mandatory pre-deposit. She submits that pre-deposit made by reversing CENVAT credit shall be valid as credit in CENVAT account since it is a duty which the assessee has already suffered, which he can encash. Debit Entry in ITC should, therefore, be treated as compliance by payment in cash. Reliance has been placed on: Cadila Health Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich makes the said reversal doubtful and in case the appeal is allowed, refund of ECRL/ ITC reversal may not be possible because there is no provision for refund of ITC under section 54(3) of the CGST Act, except on account of zero rated supply and ITC accumulated due to inverted duty structure. 9. Learned Authorised Representative submits that the issue of manner of pre-deposit to be made in cash or by debiting the electronic credit ledger (ECRL) ITC, has been decided by the Orissa High Court in M/s Jyoti Construction vs. Deputy Commissioner of CT GST 2021(10)TMI-524- Orissa High Court and it has been held that it is not possible to accept the plea of the petitioner that 'output tax', as defined under section 2(82) of the CGST Act could be equated to the pre-deposit required to be made in terms of section 107(6) of the CGST Act. Further, the proviso to section 41(2) of the GST Act limits the usage to which the ECRL could be utilised; it cannot be debited for making payment of pre deposit at the time of filing of the appeal in terms of Section 107 (6) of the CGST Act; no error was committed by the appellate authority in rejecting the Petitioner's contention tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done away with. Further, when the proposed amendment would come into effect, there would be no restriction even under GST laws to debit credit ledger for payment of pre-deposit. 13. Learned Chartered Accountant submits that the procedural amendments which are clarificatory in nature are retrospectively applicable as held in Commissioner of Income Tax (Central - I) v Vatika Township (P) Ltd [2014] 49 taxmann.com 249 . She submits that even at present, the DRC 03 form on GST portal itself gives the option of making pre-deposit payment either through cash or credit ledger; this itself shows that the intention of the legislature is to allow pre-deposit payment through credit ledger; as per principle of Contemporanea Expositoas, the clarification issued by Government can be contemporaneous exposition of its intention, as held in Spentex Industries v. CCE. 2015 (324) E.L.T. 686 (S.C.) 14. Learned Chartered Accountant submits further that the contention that refund of ITC cannot be granted in case the Appeal is allowed is erroneous as the assessee always has the option of taking re-credit of the amount debited from the Electronic credit ledger for payment of pre-deposit in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Jyoti Construction and that the decision of High Court needs to be followed over the decision of Tribunal as per judicial discipline. 19. We find that as per the provisions of section 41 of CGST Act, credit lying in the electronic Credit Ledger can be utilised only for self-assessed output Tax. Section 41 of the CGST Act provides as under. 41. Claim of input tax credit and provisional acceptance thereof. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger. The credit referred to in sub-section (1) shall be utilised only for payment of self-assessed output tax as per the return referred to in the said sub-section. 20. In this context the Orissa High Court held, in Jyothi Construction, that: 14. The Court does not find the above decision to be helpful to the Petitioner. It is not possible to accept the plea of the Petitioner that Output Tax , as defined under Section 2(82) of the OGST Act could be equated to the pre-deposit required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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