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TMI Blog2023 (9) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... venue do not take into account any of the above mentioned observations either from the Hon ble Finance Minister s speech or the provisions of CGST Act. Accordingly, the said decision cannot be a bounding decision for deciding the present issue. Further the said decision does not say that there is bar in cross utilization of the credit for the period after 30.04.2015, it holds that credit could have been cross utilized after issuance of Notification No 12/2015-CE (NT) dated 30.04.2015, stating that the notification is prospective. Therefore the said decision in any case does not support the case of revenue. There are no merits in the impugned order and the same is set aside - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... , in respect of the goods received on or after 1.3.2015, for payment of Central Excise duty. The Rule is silent with respect to the balance of credit available as on 28.2.2015. It has neither been provided that the said credit would lapse nor has the manner of its utilization been spelt out. Under the circumstances, the taking of the credit of EC and SHEC prior to, and on or after 1.3.2015, stands on the same footing. The amended Rule only specifically provides for the manner of utilization of credit in respect of the goods received on or after 1.3.2015. Under the circumstances, the contention of the appellant and their bonafide belief regarding utilization of the credit of EC and SHEC lying in balance as on 28.2.2015 for the same purpose as that taken on or after 1.3.2015 is a matter of interpretation for which imposition of penalty is not justified. The CESTAT in the case of Commissioner of Central Excise, Surat-I Versus Prime Furnishing Pvt Ltd. [2014 (308) ELT 505 (Tri-Ahmd)], have held that where the issue involved is capable of being interpreted differently, no penalty is imposable. The penalty imposed upon the appellant is, therefore, set aside." 2.1 Appellant was registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Authorised Representative appearing for the respondent- revenue. 3.2 Arguing for the appellant learned Counsel submits that ➢ 3rd, 4th & 5th provisos of Notification No.12/2015-CE(NT) dated 30.04.2015. It is clear by the 3rd proviso in the said Notification that the utilization of credit by the appellant for payment of duty cannot be faulted with. In support of this contention, he referred to some decisions, which are reproduced below:- Reserve Bank of India Vs Peerless Co.- (1987) 1 SCC 424. Central Bank of India Vs Ravindra & Ors reported in JT 2001 (9) SC 101. ➢ these proviso's should be interpreted in a manner which allows utilization of Cenvat credit on Education Cess and Secondary and Higher Education Cess for payment of Central Excise duty for the months of May and June, 2015. Accordingly, he prays for allowing the appeal. 3.4 Arguing for the revenue learned Authorised Representative supports the impugned order and,- ➢ reiterates the findings recorded therein ➢ relies upon the decision of this Tribunal in the case of M/s Pushpit Steels Pvt. Ltd. Vs Commissioner of Central Tax, Tirupati 2019 (27) GSTL 374 (Tri.-Hyd.) and prays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise duty. In effect, the general rate of Central Excise Duty of 12.36% including the cesses is being rounded off to 12.5%." 4.4 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. Accordingly, I agree with the view that the Notification No.12/2015-CE(NT) dated 30.04.2015 should be interpreted in a manner to fulfill the objective as highlighted by the Hon'ble Finance Minister in the above stated Budget Speech. Further it needs to be noted that 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. Hon'ble Supreme Court has in case of Tungbhadra Industries [2000 (118) ELT 545 (SC)] held as follows: "8. The question whether the benefits of both the notifications can be availed of simultaneously was not a subject matter of consideration before the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the decision of the Andhra Pradesh High Court, anything contrary has been said, so far as the question of utilisation of the credit for payment of duty on the manufactured goods are concerned. In this view of the matter, the Excise Authorities have rightly dealt with the matter of utilisation of the accumulated credit in favour of the appellant- manufacturer and we see no infirmity in the same." 4.5 Hon'ble Kolkata High Court has in case of Rasoi Ltd. [2020 (372) E.L.T. 56 (Cal.)] held as follows: "5. The question is whether the appellants were entitled to utilise the unutilised Cenvat credit in the manufacture of a final product other than the final product for which the inputs were utilised? 6. The appellants who were the writ petitioners want the answer to the question in an affirmative from this Court. They are aggrieved by the judgment and order of this Court dated 20th June, 2018 passed in WP 29003 (W) of 2016 (M/s. Rasoi Limited & Anr. v. Union of India & Others) virtually dismissing the writ application. 7. Mr. Chatterjee cites the Supreme Court judgment in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd. reported in 1999 (112) E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court in Rasoi Limited & Anr. v. Union of India & Ors. reported in 2004 (176) E.L.T. 101 (Cal.) which related to the self same notification. Paragraph No. 14 of this judgment is very important and is set out hereinbelow :- "Regarding the other objection of the respondents as regards relocation of the factory, after going through the provisions contained in Rules 57K to 57P and 174 of the Central Excise Rules, relied upon by Mr. Banerjee, I find that according to those provisions, goods cannot be manufactured without a licence. Those provisions demand that the manufacturing premises are to be specified in the plan while making application for licence. The licence authorises the licence holder to undertake manufacturing operation at the premises mentioned in the registration certificate. If one wants to operate manufacturing process from more than one premise, separate registration is to be made for each of those premises. The object of such separate registration is to ensure proper supervision by the Inspectors for proper accounting of the credit, goods manufactured, assessment of duty, etc. in respect of the goods produced at different places. But scheme granting money-credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the departmental representatives, hearing them, taking into account the above decisions and the observations made above in the judgment and any other decision or decisions cited by the portion by a reasoned order within 4 months of communication of this order." This decision has been affirmed by the Hon'ble Apex Court as reported at [2021 (377) ELT 466 (SC)]. 4.6 In view of the above decisions I am clearly of the view that the CENVAT credit of Education Cess and Secondary & Higher Education Cess which was available in the books of accounts of the appellant would not have been lapsed without specific provisions being made in law for lapsing the same. It is also worth noting that the in terms of Section 37 (2) (xxviii):- "Section 37. Power of Central Government to make rules. - (1) The Central Government may make rules to carry into effect the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may - (xxviii) provide for the lapsing of credit of duty lying unutilised with the manufacturer of specified excisable goods on an appointed date and also for not allowing such credit to be utilised for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire exercise of making this demand will be countered by the said provisions of the CGST Act and even if this amount is recovered in cash from the appellant simultaneously, the same should be refunded in cash to him, as per the above said provisions of CGST Act. 4.8 Similar view has been expressed by the Hon'ble Madras High Court in case of Sutherland Global Services Pvt. Ltd. [2019 (30) G.S.T.L. 628 (Mad.)] "17. In the present case, the scheme of Section 140 nowhere provides for utilisation of EC, SHEC and KKC. The Learned Counsel for the Revenue points out that with the abolishing of EC, SHEC and KKC in 2015 and 2016 respectively, the levy as well as availment of credit in regard to the aforesaid cesses has been removed from the sweep of the Act. To a pointed query from the Bench as to why the assessee was permitted to carry forward the credit manually in Cenvat register, the Revenue would only state, while admitting the aforesaid as a fact, that that by itself would not be a determinating factor as to the proper utilisation of the credit. The Revenue relies on the following cases : (1) M/s. Osram Surya P. Ltd. v. Commissioner of Central Excise, Indore [2002 (142) E.L.T. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inment Tax, Purchase Tax, State Excise Duties, Stamp Duty, Taxes on vehicles, Tax on goods and passengers, Taxes and duties on electricity as well as service tax. While integrating the taxes, the intention of the Government was evidently to provide a seamless model for transitioning of all credits hitherto availed of by an assessee under the erstwhile VAT and other indirect tax levies to the Goods and Services Tax regime as well. The benefits that had been made available and that had been permitted to continue in the erstwhile taxing regime were thus meant to be continued. 20. EC was introduced in 2004, SHEC in 2007 and KK Cess in 2016. Upon introduction of the levy of EC in 2004, Section 95 of Finance Act, 2004 provided that EC would be levied in addition to service tax on taxable services and could be availed of and utilised against payment of EC alone. Likewise for SHEC, introduced in 2007, it was made clear that the benefits of SHEC on input were available to be utilised only as against the respective payments alone and not on the payment of excise duty or service tax on manufactured goods or taxable services. Likewise for KK cess. 21. Both EC and SHEC were abolished with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended rule 6(3), the following options are available to the taxpayers not maintaining separate accounts; (i) Option No. 1 - In respect of exempted goods, he may pay an amount equal to 10% of the value of exempted goods; and in respect of exempted/non-taxable services, he may pay an amount equal to 8% of the value of such exempted/non-taxable service; OR (ii) Option No. 2 - He may pay an amount equivalent to Cenvat credit attributable to inputs and input services attributable to exempted goods and non-taxable/exempted services. As stated earlier, may taxpayers had accumulated Cenvat credit balance as on 1-4-2008. The matter to be considered was whether this credit balance should be allowed to be utilized for payment of service tax after 1-4- 2008. As no lapsing provision was incorporated and that the existing Rule 6(3) of the Cenvat Credit Rules does not explicitly bar the utilization of the accumulated credit, the department should not deny the utilization of such accumulated Cenvat credit by the taxpayer after 1-4-2008. Further, it must be kept in mind that taking of credit and its utilization is a substantive right of a taxpayer under value added taxation scheme. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to goods manufactured prior to 16-3-1995, where duty payment stood discharged and credit available for further manufacture. 27. The relevant observations are extracted hereunder : '5. ……. As pointed out by us that when on the strength of the rules available certain acts have been done by the parties concerned, incidents following thereto must take place in accordance with the scheme under which the duty had been paid on the manufactured products and if such a situation is sought to be altered, necessarily it follows that right, which had accrued to a party such as availability of a scheme is affected and, in particular, it loses sight of the fact that provision for facility of credit is as good as tax paid till tax is adjusted on future goods on the basis of the several commitments which would have been made by the assessee concerned. ….. 6. We may look at the matter from another angle. If on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rule. There was lapse of credit, which could not be utilized, though the tax/duty had not been withdrawn. The Supreme Court noticed that the credit attributable to inputs had already been used in manufacture of final products that had been cleared, and this alone was sought to be lapsed, notwithstanding the fact that the right had become absolute. On a holistic reading of the entire scheme, it was observed that when acts have been done by the parties concerned on the strength of the Rules, incidence following thereto must take place in accordance with the scheme or the Rules, otherwise it would affect the rights of the assessees. Further, right had accrued on the date when the assessee had paid tax on the raw materials or inputs and the same would continue till the facility available thereto got worked out or until the goods existed. As noticed above, tax/duty had not been withdrawn. Lastly and more importantly, Section 37 of the Central Excise Tariff Act, 1985 did not enable the authorities to make the Rule impugned therein. The legal ratio in Eicher Motors Limited and Another (supra) was followed in Samtel India Limited (supra) wherein amended Rule 57F(17) of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aneous therewith the petitioners also challenged Instruction dated 7-12-2015 that provided as follows : B.21 - Hyderabad, Coimbatore, Vadodara, Vishakhapatnam, Delhi Zone - Cenvat Credit - Balance of Education Cess and Secondary & Higher Education Cess lying in the CENVAT Credit Account : Issue : Exemption from levy of Education Cess and Secondary & Higher Education Cess has been provided w.e.f. 1-3-2015 vide notification no. 14/2015-C.E. & 15/2015-C.E., both dated 1-3-2015, Sub-rule (7)(b) of Rule 3 of CENVAT Credit Rules, 2004, specifies that CENVAT credit of specified duties shall be utilized for payment of those specified duties only. CENVAT Credit of Education Cess and Secondary & Higher Education Cess can be utilized only for payment of Education Cess and Secondary & Higher Education Cess, respectively. Consequent upon grant of exemption there is issue of utilization of the accumulated credit of the past. It is suggested that an amendment to sub-rule (7)(b) of Rule 3 of CENVAT Credit Rules, 2004 may be made to allow the utilization of balance CENVAT Credit of Education Cess and Secondary & Higher Education Cess towards payment of either duty of excise or Service Tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id decision relied upon by the Revenue. The decision and the observations made therein have to be seen in the context of the prayer advanced in that case and in the light of the statutory provisions/rules existing at the relevant point in time. 35. Firstly, the Instructions issued by the Central Board of Excise and Customs dated 7-12-2015, reveal a policy decision, not to allow utilisation of accumulated credit of EC and SHEC, but nowhere states that the credit has lapsed. The Board only says that the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 which stipulates that Cenvat credit shall be utilised only as against payment of specified duties. The request of the petitioner in that case has to be seen in this perspective and specifically in the light of the embargo placed by Rule 3(7)(b) as aforesaid. The Board could well have stated even at that juncture that the credit lapsed, but did not choose to do so. 36. Then again, the Division Bench while considering the rival contentions of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the assessee would certainly have taken into account that credit was available for set-off against output tax liability. Such credit accumulated has not been stated to have lapsed. The impugned action of the assessing authority in rejecting the claim has however the consequence of insertion of a Rule/Regulation to this effect, which, in my view, is impermissible. 42. A fiscal statute has to be read and understood, as seen. The interpretation should be on the basis of what is apparent, apart from being strict. These are settled principles that need no reiteration, nor support of case law. If one were to apply these propositions to the case on hand, the provisions of Section 140(1) provide for the transfer of all credits and levies, barring those set out in the proviso, which is, (i) where the said amount of credit is inadmissible as ITC (ii) where an assessee has not furnished returns required under the existing law for six preceding months or (iii) where the said credit relates to goods manufactured and cleared under exemption notifications. These are the only three conditions/embargos that bar the transfer of accumulated credit. The language of Section 140(1) and (8), both ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be applicable to revive a claim that was already beyond time. The Bench noted that the amendment would ordinarily be retrospective in nature. Thus the benefit of one year for filing claim for rebate would be available from 12-5-2000 when the limitation was extended from six months to 12 months. Moreover, the proviso had been added in the section itself to the effect that the amended provision would not have the effect of bringing to life a dead claim. 46. The judgments in the case of S.S. Gadgil v. Lal and Co. (AIR 1965 SC 171), J.P. Jani, Income Tax Officer v. Induprasad Devshanker Bhatt (AIR 1969 SC 778), New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840], T. Kaliamurthi v. Five Gori Thaikkal Wakf [(2008) 9 SCC 306], Thirumalai Chemicals Ltd. v. Union of India [(2011) 6 SCC 739 = 2011 (268) E.L.T. 296 (S.C.)] and Mafatlal Industries Ltd. v. Union of India [(1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] were cited by the Supreme Court in allowing the Revenues' appeal and holding that a dead claim could not be revived by a subsequent benefit. 47. Thus the Revenue argues that the accumulated credit of EC, SHEC and KKC is dead and gone and there is nothing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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