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Issues: Whether the balance of Education Cess and Secondary & Higher Education Cess lying in CENVAT credit as on 01.03.2015 could be utilised for payment of basic Central Excise duty on clearances made after that date, and whether the penalty and demand were sustainable.
Analysis: The credit in question related to Education Cess and Secondary & Higher Education Cess, both of which stood withdrawn from 01.03.2015. The Court treated the issue as no longer res integra and applied the Delhi High Court ruling which had held that, despite the notifications issued by the Central Government, the balance credit of those cesses could not be used for discharge of basic Central Excise duty on clearances after 01.03.2015. The plea that the matter was one of interpretation was rejected, and the appellant's status as a organised sector assessee was noted while upholding the finding of conscious wrong utilisation.
Conclusion: The utilisation of Education Cess and Secondary & Higher Education Cess credit for payment of basic Central Excise duty was held impermissible, and the demand with penalty was sustained against the assessee.
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