TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 524
X X X X Extracts X X X X
X X X X Extracts X X X X
....ACTS OF THE CASE A. M/s Kansai Nerolac Paints Limited are engaged in business of manufacture of paints and engaged in provision of works contract service as well. The works contract services are carried out from the company's Head Office. B. The appellant filed an application for advance ruling u/s 98 of the CGST Ac2017 and the MGST Act 2017 raising the question as to whether the accumulated credit by way of Krishi Kalyan Cess ( KKC) as appeared in the service tax return of Input Service Distributor (ISD) on June 30, 2017 which is carried forward in the electronic credit ledger maintained by the company under CGST Act, 2017 will be considered as admissible input tax credit. C. It was decided by the ARA through order ( No GST-ARA-18/2017-18/B-25 dt 5.4.2018) that KKC as appeared in the service tax return of Input Service Distributor (ISD) on June 30, 2017 which is carried forward in the electronic ledger maintained by the Appellant under CGST Act, 2017, will not be considered as admissible input tax credit. D. The appellant has therefore filed an appeal against the said order under section 100 of the CGST Act 2017/MGST Act 2017. GROUNDS OF APPEAL 1. The impugned Ruling is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw to cross utilized the unutilized EC and SHE cess with excise duty and service tax. In the case of appellant, Section 161(5) of theFinance Act, 2016 brought KKC under Chapter V of Finance Act, 1994 and 101st amendment of constitution subsumed Chapter V of Finance Act, 1994 on introduction of Goods and Service Tax. Moreover section 140(10 of CGST Act,2017 allows unutilized CENVAT credit (KKC qualified as CENVAT credit in view of Rule 3(a) of CCR) to carry forward to electronic ledger without questioning the allow ability of the same under the earlier tax regime. The only condition is that the same should be admissible under the new tax regime. Therefore, the decision of Delhi High Court on which Advance Ruling Authority has relied upon is not applicable in the case of appellant. 5. Advance Ruling Authority relies on the answer given by CBEC in response to FAQ to negate the claim of the appellant without understanding the legal provision. Moreover answer given by CBEC in response to FAQ does not have any legal binding on the Appellant. PERSONAL HEARING 6. The case was heard on 18.07.2018. It was contended by the appellant that the Advance Ruling Authority did not discuss their g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....centralized registration the appellant also had separate registration as ISD to distribute the eligible CENVAT credit. According to Rule ll(m) of the CENVAT credit Rules, 2004; the appellant received CENVAT credit at head office which also included KKC, which the appellant could not distribute to its factory as the KKC could be utilized only against the KKC liability. As a result, there was accumulation of KKC credit in the service tax ISD return. The issue is the admissibility of the KKC credit transitioned by the appellant. 8. We have gone through the grounds of appeal as well as all the contention raised by him during the hearing. The ARA in order dt.5th April, 2018 has opined that accumulated credit which was carried forward will not be allowed as admissible credit towards Input Tax Credit. We agree with the observation of the ARA on the basis of the following reasons. 9. Though the ARA states that the CGST Act does not have the definition of the words 'CENVAT credit', it is seen that the Explanation provided at the end of the Transitional provisions (Chapter XX) does give the scope of the term 'CENVAT credit'. The Explanation is reproduced below:- Explanation- For the purp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, 2004 (23 of 2004); and (xa) the Secondary and Higher Education Cess on taxable services leviable under section 136 read with section 140 of the Finance Act, 2007 (22 of 2007); and (xi) the additional duty of excise leviable under section 85 of Finance Act, 2005 (18 of 2005) 11. It is clear from the above list that no reference is made to the KKC until Notification No.28/2016/Central Excise (N.T.) 26 May, 2016 came into effect. , the Central Government made the following rules which came into effect from 01.06.2016. These rules were intended to amend the CENVAT Credit Rules, 2004. By the said amendment rule 1(a) was inserted. This rule is reproduced below:- "(la) : Provider of output service shall be allowed to take CENVAT credit of the Krishi Kalyan Cess taxable service leviable u/s.161 of the Finance Act, 2016 (28 of 2016). 12. The CENVAT credit was available in respect of KKC. However, we need to see the following amendments, too, as were brought by the aforesaid Notification No. 28/2016 - Central Excise (N.T.), the 26th May, 2016 - i. in sub-rule (4), after the ninth proviso, the following proviso was inserted - "Provided also that the Cenvat credit of any duty s....