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TMI Blog2023 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... cenvatable? - HELD THAT:- Sub-rule (vii) of Rule 3 of CENVAT Credit Rules, 2004, specifically provided that CENVAT Credit in respect of Education Cess and Secondary and Higher Education Cess shall be utilised only towards the payment of Education Cess leviable on the taxable services only and not against the normal excise duty. Thus CENVAT Rules, 2004 clearly restricted the utilisation of Education Cess and Higher and Secondary Education Cess on the output tax on goods and services and not against the normal excise duty or service tax liability. It is not disputed even before me that cross utilisation of CENVAT Credit in the form of Education Cess and Secondary and Higher Education Cess against normal service tax and excise duty liability was not allowed. The definition of 'eligible duties and taxes' as per the explanation 3 under Section 140 of the CGST Act, 2017 was amended with retrospective effect from 01.07.2017 whereby it is specified that cesses are excluded from the definition of 'eligible duties and taxes', Thus, the credit is ab initio not available for utilization for GST. In view of the above, cesses are not be transitioned through TRAN-1, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide which the refund claim for the amount of Cenvat credit of EC and SHEC, paid prior March 2015, has been denied to the appellant as was filed under the garb of transitional provisions of CGST Act, 2017 - appeal dismissed. - Excise Appeal No. 30041 of 2022 - FINAL ORDER NO. A/30018/2023 - Dated:- 17-3-2023 - DR. RACHNA GUPTA, MEMBER (JUDICIAL) Mr.Siva Rajan, Chartered Accountant for the appellant Mr. V.R. Pavan Kumar, Authorized Representative for the Respondent ORDER The appellant in the present case is engaged in manufacture of compressors. On implementation of Central Goods and Service Tax (GST) regime, while migrating thereto the appellant carry forward Rs.18,20,555/- as the available balance of excise duty, Service Tax, Education Cess (EC) and Secondary Higher Education Cess (SHEC) vide GST Tran-1 as prescribed under section 140 (1) of Central Goods and Service Tax Act, 2017 (CGST Act) on 26.12.2017. It was clarified to the appellant that the eligible duties allowed to be transitioned does not include Cess by amending section 140 (1) (a) of CGST Act retrospectively. The appellant reversed the aforesaid balance/credit under protest and later filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Cenvat Credits of duty for it to not to be an eligible duty. It is submitted that the adjudicating authorities below have incorrectly understood the provisions of law and the order under challenge is passed without the proper application of mind. Ld. Counsel further submitted that Section 142 (3) of CGST Act covers the case of appellant as the CESS balance is always the part of Cenvat Credit. There is no denial that the balance in question for the period upto 30th June, 2017 was duly carried forward in the in the statutory returns. Merely because CESS cannot be transitioned to GST for utilization, the refund of same cannot be rejected. 3.1 The appellant has relied on the following judgments:- (a) M/s Jain Vanguard Polybutene Ltd Central Excise Appeal No. 45/2010 decided on 28 June 2010 by Bombay High Court affirmed by Supreme Court in SLP 10805/2011 dated 12.7.2011. (b) Union of India v Slovak India Co. Pvt. Ltd. -2006 (201) ELT 559 (Kar). (c) Union of India v. Slovak India Co. Pvt. Ltd. -2008 (223) ELT A170 (SC) (d) Rama Industries Ltd. v. Commissioner of Central Excise, Chandigarh passed by Hon'ble High Court of Punjab Haryana in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er impressed upon that the claim has been hopelessly barred by time. EC SHEC extinguished with effect from 01.03.2015 but the appellant remained silent for claiming the refund thereof since then and the claim in question dated 27.06.2020 is the one as is filed after five and a half years of the aforesaid date. There seems no reason for the extension of relevant date from 01.03.2015 to 30.08.2018. All the decisions relied upon by the appellant are impressed upon to be not applicable to the facts and circumstances in present appeal. The distinguished fact being the claim of refund of unutilized credit of such CESS (EC SHEC) which extinguished from 01.05.2015. With these submissions, no infirmity in the order under challenge is impressed upon and the appeal is accordingly, prayed to be dismissed. 7. Having heard the rival contentions of the parties. 8. The moot question to be adjudicated in the present case is: Whether the cash refund of Cenvat credit of Cess in the form of Education Cess (EC) and Secondary Higher Education Cess (SHEC) is permissible as the assessee was unable to utilize the said credit. For the purpose, foremost, I observe that Cess is commonly employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this Chapter as surcharge for purposes of the Union, a cess to be called the Secondary and Higher Education Cess, to fulfil the commitment of the Government to provide and finance secondary and higher education. (2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilize, such sums of money of the Secondary and Higher Education Cess levied under subsection (12) of section 2 and this Chapter for the purposes specified in subsection (1) as it may consider necessary. X XXXXX XXXXXX XXXXXX XXXXXX 128. (1) The Secondary and Higher Education Cess levied under section 126, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985, being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Secondary and Higher Education Cess on excisable goods), at the rate of one per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess chargeable under section 93 of the Finance (No. 2) Act, 2004 and Secondary and Higher Education Cess on excisable goods) which are levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 2004, specifically provided that CENVAT Credit in respect of Education Cess and Secondary and Higher Education Cess shall be utilised only towards the payment of Education Cess leviable on the taxable services only and not against the normal excise duty. Thus CENVAT Rules, 2004 clearly restricted the utilisation of Education Cess and Higher and Secondary Education Cess on the output tax on goods and services and not against the normal excise duty or service tax liability. It is not disputed even before me that cross utilisation of CENVAT Credit in the form of Education Cess and Secondary and Higher Education Cess against normal service tax and excise duty liability was not allowed. 12. The controversial part in the present case is that the unutilized part of EC and SHEC lying to the credit of the appellant in his ledger continued even after the levies were omitted by the Finance Act, 2015 w.e.f. 01.03.2015 that too up to 13.06.2017 and thereafter the appellant had transferred the same through GST TRAN-1 to the GST regime w.e.f. 01.07.2017. Though on being pointed out by the department, the appellant reversed the same, however, claimed the refund thereof. It is observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's current account maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and Interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led principle of interpretation that the legislative instrument has to be read as a whole. The phrases in the sentences have to be read in their cogent sense, thus, Rule 5 also has to be read as whole and not in parts. The whole conveys only one sense i.e. refund of unutilized credit is only permissible in case of export of goods and not for any other reason. I draw my support from the decision of Hon ble Apex Court in the case of Union of India and Ors. Vs. Ind- Swift Laboratories Limited reported as 2011 (265) E.L.T. 3 (S.C.)wherein the Hon ble Apex Court summarized the legal position as follows: 20. A taxing statute must be interpreted in the light of what is clearly expressed. It is not permissible to import provisions in a taxing statute so as to supply any assumed deficiency. In support of the same we may refer to the decision of this Court in CST v. Modi Sugar Mills Ltd. wherein this Court at AIR para 11 has observed as follows: 11. In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 regime. Hon ble Apex Court in the case of Union of India v. Uttam Steels Ltd., (2015) 13 SCC 209 has held that w.e.f. 01.07.2017 the onset of CGST Act cannot be treated as revival or extension of limitation when claim itself becomes a dead claim. Though the appellant had placed reliance upon the decision of Eicher Motors Ltd. Vs. Union of India 1999 (106) ELT 3 (S.C.) but the said decision has been distinguished by Hon ble Delhi High Court in Cellular Operators Association of India (supra) case by holding that with the levy of EC and SHEC being taken away in the year 2015 itself, it amounts to the facility for working out the earned credit to have been taken away and hence, the possibility of continuing the right is also held to have seized. Thus I hold that the balance of EC and SHEC credit available on inputs lying before 01.03.2015 cannot be utilized for payment of excise duty. Though Notification No. 12/2015 dated 30.04.2015 the Cenvat has taken on or after 01.03.2015 of EC @ 2% and SHEC @ 1% to be utilized for payment of duty of excise. But in the present case the Cenvat of Cess paid prior March, 2015 was never taken till the onset of CGST Act on 01.07.2017. 18. Coming to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said period can still be extended by another 30 days for reasons to be recorded by the Commissioner. 21. Therefore, the Legislature has very carefully specified the duties and taxes in respect of stocks held for which requisite declaration in Form TRAN-1 to be submitted as on 30th June 2017 and also the service tax in respect of services which are input services received before 30th June 2017 of which invoices may not have been received before that date and therefore, a relaxation of 30 days is provided for them. Therefore, the Court by any intendment or implication cannot include the aforesaid three types of Cesses, as are in question, in the terms of Eligible Duties and Taxes or Eligible Duties with reference to Explanation 1 and Explanation 2 to be carried forward and transitioned under Section 140 of the Act. 22. The Legislature took further care by inserting Explanation 3 which is couched in negative terms and for removal of any doubt, it further clarified that such eligible duties and taxes will exclude any Cess which has not been specified in Explanations 1 and 2. But, as noted above, the imposition or levy of Education Cess and Secondary and Higher Education Ces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if taken in Electronic Ledger and notified in Form TRAN-1, does not guarantee any such right of utilisation independent of other parts of Section 140 specially ignoring Explanation 3. 24. I found considerable force in the contention raised on behalf of the Revenue before us that credit of such Education Cess and Secondary and Higher Education Cess which could not be utilised against the Output Education Cess and Secondary and Higher Education Cess Liability, while the said impost was in force prior to Finance Act, 2015, became a dead claim in the year 2015 itself and therefore, there was no question of allowing a carry forward and set off after a gap of two years against the Output GST Liability with effect from 01.07.2017. 25. As far as the Section 142(3) of CGST Act is concerned as already appreciated above that the refund has to be dealt with in accordance of Section 11B as already explained above that refund of EC and SHEC, in the given circumstance, shall not be available under Section 11B of Central Excise Act, 2002 nor even under Rule 5 of CCR, 2004 (as already discussed above). No question of any kind of eligibility of the appellant to claim the refund of such c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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