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TMI Blog2024 (6) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... to be applied prospectively and since the said circular has been issued after the filing of the appeals, the enforcement of the same can only have prospective effect and therefore, the pre-deposit made by the appellants from electronic credit ledger are in compliance to Section 35F of CEA - that decision of the Bombay Bench in SAPPHIRE CABLES SERVICES PVT. LTD. VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, BELAPUR [ 2023 (9) TMI 1482 - CESTAT MUMBAI] is not applicable as the circular was held to be inapplicable since it was issued after the filing of the appeal and hence, has to operate prospectively. Applicability of Amended Section 41 of CGST Act, 2017 - HELD THAT:- There are no merit in the submissions made by the learned counsel for the appellant that the amended provisions of Section 41 of the CGST, where the phrase that credit shall be utilized only for self-assessed output tax is no longer existing and therefore, there is no restriction on the utilization of the credit. The scheme for utilization of the credit for making pre-deposits under Section 35F of CEA has to be understood in the light of the Circular dated 28.10.2022 which has also been accepted by the Mumbai Bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (Bombay)/(2023) 3 Centax 86 (Bom.)], (b) M/s. Tulsi Ram and Company Vs. Commissioner (Allahabad High Court) [2022 (67) GSTL 62(All.)], (c) M/s. Larsen Toubro Ltd. Vs. Joint Commissioner Ors. (Madras High Court) [W.P. Nos. 24577 and 24579 of 2023 W.M.P. Nos. 23999 and 24002 of 2023 dated 21.08.2023] (d) M/s. Saphire Cables Services Pvt. Ltd. Ors. Vs. Commissioner of CGST CE (CESTAT, Mumbai) [Miscellaneous Order No. 85605/2023 dated 27.09.2023] 3. Shri S.K. Ray, learned Authorised Representative for the Revenue has relied on the decisions of this Tribunal in M/s. Johnson Matthey Chemical India Pvt. Ltd. (CESTAT Allahabad Bench) [Defect Diary No.701942022 dated 23.08.2022] and M/s.Army Welfare Housing Organisations (Tribunal-Delhi) [Defect Misc. Order No.50-51/2024 dated 13.03.2024] and also referred to the Circular dated 28.10.2022 and 24.11.2023 issued by the CBIC to say that pre-deposit made through DRC-03 credit ledger is not a valid payment in compliance of Section 35F of CEA. 4. Before adverting to the issue, we would like to refer to the decision in the case of M/s. Sodexo India Services Pvt. Ltd. [2022 (66) GSTL 257 (Bombay)] where the Bombay High Court dealt with the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the existing law and hence cannot be said to be covered under transitional provisions of CGST Act. 4. In view of the above, it is clarified that payments through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposits under Section 35 F of CEA, 1944 and Section 83 of Finance Act, 1994 read with Section 35 F of the CEA. There exists a dedicated CBIC-GST Integrated portal, https://cbic-gst.gov.in [Board s Circular No. 1070/3/2019-CX dated 24th June, 2019 refers in this regard], which should only be utilized for making pre-deposits under the CEA, 1944 and the Finance Act, 1994. 6. In continuation to the Circular referred above, CBIC issued the Circular No. CBIC-20010/16/2023-GST dated 24.11.2023 which further fortifies the intent of the government with reference to the refund of pre-deposit for the cases pertaining to Central Excise and Service Tax made through DRC-03 under GST in the following words:- Subject:- GST Policy Wing comments wrt refund of pre-deposit for cases pertaining to Central Excise Service Tax made through DRC-03 under GST-regarding. 2.1 In the instant case, it appears that the appellants have deposited an amount through DRC-03 under GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied retrospectively while oppressive circular has to be applied prospectively and since the said circular has been issued after the filing of the appeals, the enforcement of the same can only have prospective effect and therefore, the pre-deposit made by the appellants from electronic credit ledger are in compliance to Section 35F of CEA. We are of the view that decision of the Bombay Bench in M/s. Saphire Cables is not applicable as the circular was held to be inapplicable since it was issued after the filing of the appeal and hence, has to operate prospectively. Whereas in the present case, the order-in-original, which has been challenged before us, has been passed on 27.09.2023 and the present appeal has been filed before this Tribunal on 18.12.2023, which is much later to the issuance of the Circular dated 28.10.2022 and on the basis of the principle of operation of the Circular to be prospective, the same is applicable. Consequently, in terms of the circular/instructions dated 28.10.2022, payment through DRC 03 is not a valid mode of payment for making pre-deposit under Section 35F of CEA and Section 83 of FA. 8. We may now deal with the decisions of the various High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registered person. 5. It is further reiterated that as output tax does not include tax payable under reverse charge mechanism, implying thereby that the electronic credit ledger cannot be used for making payment of any tax which is payable under reverse charge mechanism. As noticed in the decisions in M/s. Oasis Reality and M/s. Tulsi Ram Co., what is important to be seen is any proceedings instituted under the provision of GST Laws where the payment towards output tax can be made by utilization of the amount available in the Electronic Credit Ledger of a registered person. We are, therefore, of the opinion that the decisions of the Bombay High Court in M/s. Oasis Reality and the Allahabad High Court in M/s. Tulsi Ram Company are not applicable in the facts of the present case, where the pre-deposit has to be made under the provisions of the Excise Act and the Finance Act. 11. On the other hand, if we examine the Circular dated 28.10.2022, the same has been issued by Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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