AI Drafter 
TaxTMI 
TaxTMI 
2022 (3) TMI 1254
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....addition to excise duty, and the appellant availed CENVAT credit under the provisions of the CENVAT Credit Rules 2004 [the Credit Rules] on cess paid on procurement of goods and services. However, the notification dated 01.03.2015 exempted levy of the cess on all goods falling in the First Schedule to the Central Excise Tariff Act, 1985 [the Tariff Act]. Thus, w.e.f. 01.03.2015 only central excise duty was leviable and levy of cess was exempted. The closing balance of the cess as on 28.02.2015 could not consequently be utilised by the appellant post 01.03.2015 and it was carried forward in the central excise returns. This was for the reason that credit of cess could be utilised for payment of the cess under the Credit Rules and could not have been utilised for payment of excise duty. On introduction of the Central Goods and Service Tax, 2017 Act [GST Act] w.e.f. 01.07.2017, the closing balance of the credit on cess appearing in the excise returns filed by the appellant in the month of June 2017 was not carried forward and instead the appellant filed a claim for refund of such balance of Rs. 53,47,491/- of credit on cess on 29.05.2018. 3. A show cause notice dated 16.07.2018 was,....
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....t availed closing balances of ED Cess and SHE Cess of ER_1 in TRAN1, hence filed for refund claim." 5. The Assistant Commissioner, by order dated 12.11.2018, rejected the refund claim and the relevant portion of the order is reproduced below: "8. I have carefully gone through the refund application and the documents on record and defence submission of the claimant and find that: (i) The refund claim originally is not submitted in proper format and also found incomplete under the provisions of Section of Section 11B of the Central Excise Act, 1944 as not accompanied by such documentary evidence to establish that amount of refund claimed was actually paid by them and not provided information in regard to period involved. (ii) The Education Cess Secondary Higher Education Cess has been withdrawn w.e.f. 01.03.2015 vide Notification No. 14/2015-CE and 15/2015-CE both dated 01.03.2015. (iii) As these Cesses have been phased out vide above Notifications and no new liability to pay such Cesses arises, no vested right exists of claimant in relation to the accumulated credit of the part. (iv) Further in the minutes of Tariff Conference held on ....
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....came ineligible credit for TRAN-1 and thus they could not transfer the impugned Cess credit to their electronic credit ledger. Thus, they had filed a refund claim on 29.05.2018 which is well within the time limit of one year and the same cannot be considered as time barred. 10. I observed that in the instant case the balance credit of Education Cess and S.H.Edu. Cess as on 30.06.2017 with the appellant being ineligible cess credit the appellant could not have transferred such credit in their electronic credit ledger thorough TRAN-1. The impugned Cesses had been phased out w.e.f. 01.03.2015 vide Notification No. 14/2015-CE & No. 15/2015-CE both dated 01.03.2015. 11. In this regard, I find that the issue has already been discussed in the Tariff Conference held on 28th & 29th October 2015 in which it has been decided that accumulated credit of education cess and secondary & higher education cess, which had been phased out, could not be utilized any further. As far as the claim of refund of unutilized credit of impugned cesses is concerned, I find that the matter has already been decided by Hon'ble High Court of Rajasthan in the case of M/s. Banswara Syntex Ltd. Versu....
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....sion of the Tribunal in Punjab National Bank vs. Commissioner of Central Tax, Bangalore North [2021-VIL-289-CESTAT-BLR-ST]. 8. Shri O.P. Bisht, learned authorised representative appearing for the Department, however, made the following submissions: (i) The assessee cannot claim cash refund or encashment of unutilized and unavailed amount of credit. In support of this connection reliance has been placed on the decision of a learned Member of the Tribunal in Bharat Electricals Ltd. vs. Commissioner of C.T., Secunderabad-ST [2020 (41) G.S.T.L 465 (Tri-Hyd)] (ii) Since cess was not payable after the cut-off date, disallowing credit thereafter is justified. In support of this contention, reliance has been placed on the judgment of the Delhi High Court in Cellular Operators Association of India vs. Union of India [2018 (14) G.S.T.L. 522 (Del.)]; (iii) Clarification issued by Circular dated 07.12.2015 also disentitles the appellant from claiming refund; and (iv) The balance credit of cess with the appellant as on 30.06.2017, being ineligible cess credit, the appellant could not have transferred such credit in electronic credit ledger thorough TRAN-1.....
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....umbai); and 4. CCE, Ahmedabad v. Arcoy Industries, 2004 (170) E.L.T. 507 (Tri.- Mumbai). of the Tribunal in which it has been held that the assessee is entitled to refund of the amount deposited if the assessee has gone out of the Modvat Scheme or their unit is closed. Aggrieved against the order of the Tribunal, revenue filed C.E.A. No. 5/2006 in the High Court of Karnataka at Bangalore. The High Court by its impugned order has affirmed the order of the tribunal and dismissed C.E.A. No. 5/2006 filed by the revenue. Learned ASG appearing for the Union of India fairly concedes that those decisions of the Tribunal, which were relied upon by the Tribunal, have not been appealed against. In view of the concession made by the learned ASG, this special leave petition is dismissed." 15. It is, therefore, clear from the aforesaid decision rendered in Slovak India Trading by the Tribunal, the Karnataka High Court and the Supreme Court that refund has to be granted when either the there is a closure of the factory or when an assessee goes out of the Modvat scheme. 16. In Bharat Heavy Electricals, a Division Bench of the Tribunal examined whether cred....
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.... Courts on the same issue." (emphasis supplied) 17. In Schlumberger Asia Services, the Tribunal followed the aforesaid decision of the Tribunal in Bharat Heavy Electricals. 18. In Kirloskar Toyota, the Tribunal while examining whether refund claim of accumulated balance of unutilised credit of cess available in the books, can be refunded under section 11B of the Central Excise Act 1944 [the Excise Act] and held, in view of the aforesaid Division Bench decision of the Tribunal in Bharat Heavy Electricals, as also the decisions of the Supreme Court and the Karnataka High Court in Slovak India Trading that an assessee is entitled to refund of unutilised credit of cess after the introduction of GST. The relevant observations of the Tribunal are as follows: "6. After considering the submissions of both the parties and perusal of the material on record as well as various judgments relied upon by both the parties cited supra, I find that in the present case the appellant has filed the refund claim of accumulated balance of unutilized credit of Education Cess and Secondary and Higher Education Cess available in their books under Section 11B of the Central Excise Act within a....
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.... credit of Education Cess and Secondary and Higher Education Cess could be claimed as refund under Section 11B of the Central Excise Act, 1944? Therefore, in view of the contradictory decisions of various High Courts, this Tribunal is bound to follow the decision of the jurisdictional High Court and the jurisdictional High Court has held in the case of Slovak India Trading Company (cited supra) which has been relied upon by the Division Bench of the Delhi Tribunal in the case of Bharat Heavy Electricals Ltd. has categorically held that refund can be granted of the cesses viz. Education Cess and Higher Education Cess which could not be transitioned into GST. As far as time-bar aspect is concerned, the findings in the impugned order regarding time-bar is beyond the show-cause notice as well as Order-inOriginal and the same is not sustainable in law. Hence, by following the ratios of the Division Bench of Delhi Tribunal in Bharat Heavy Electricals Ltd. and jurisdictional High Court in Slovak India Trading Co. Pvt. Ltd., I allow the appeal of the appellant." (emphasis supplied) 19. In Nichiplast India, a learned Member of the Tribunal observed as follows: "12. Having con....
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....Electricals Ltd., wherein it has been held as follows: "4. Learned departmental representative draws the attention of the bench to the judgment of the Larger Bench of the Hon‟ble High Court of Bombay in the case of Gauri Plasticulture Pvt Ltd [2019-TIOL-1248-HC-MUM-CX-LB] on this issue in which questions framed by the Hon‟ble Larger Bench were as follows: "(a) Whether cash refund is permissible in terms of clause (c) to the proviso to section 11B(2) of the Central Excise Act, 1944 where an assessee is unable to utilize credit on inputs? (b) Whether by exercising power under Section 11B of the said Act of 1944, a refund of un-utilised amount of Cenvat Credit on account of the closure of manufacturing activities can be granted? (c) Whether what is observed in the order dated 25th January 2007 passed by the Apex Court in Petition for Special Leave to Appeal (Civil) No. CC 467 of 2007 (Union of India vs Slovak India Trading Company Pvt Ltd.) can be read as a declaration of law under Article 141 of the Constitution of India?" and they were answered as follows: "40. As a result of the above discussion, we answer the questi....
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....It is noteworthy that an assessee is entitled to take Cenvat credit in respect of the inputs, immediately on their arrival in his factory or premises as provided in Rule 4 of the Cenvat Credit Rules, 2004. Hence, it is the Cenvat Credit Rules, 2004, which bestows upon an assessee, a right to claim credit of duty or cess paid on its inputs or input services. Such right accrues, fructifies and crystallizes on the date of procurement of the goods or services, but the same is available only to the extent of availing credit of such tax, in accordance with the existing conditions and provisions prevailing on that date. 24. In other words, Cenvat credit lying in an assessee‟s account creates an infallible and indefeasible right, which in the present case is indispensable and undeniable; however, to the extent of making payment of the corresponding cess, if any, payable on or after that date, as categorically stipulated in 1st and 2nd proviso to Rule 3(7)(b) of the Cenvat Credit Rules, 2004. 25. Since the Cenvat Credit Rules, the repository of rights of an assessee to avail credit of the duty or other sums paid on inputs does not entail or even envisage refund of su....
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.... 29.10.2015 and for a direction that the credit accumulated on account of cess should be allowed to be utilised for payment of service tax leviable on telecommunication services. The submissions of the petitioner was that the unutilised amount of cess, after it was exempted w.e.f. 01.03.2015, should be permitted to be utilized for payment for payment of tax on excisable goods and taxable services as it was subsumed in the central excise duty which had been raised in 2015. The High Court rejected this contention. 26. In the present case, the plea of the appellant is not for adjustment of the credit on cess amount against payment of excise duty or service tax, but it is for refund of credit accumulated on account of payment of tax on cess. This decision would, therefore, not help the respondent. 27. Learned authorised representative also place reliance upon the notification dated 07.12.2015 issued by CBEC to contend that a policy decision had been taken not to allow utilisation of accumulated credit of cess, after cess had been phased out and it is reproduced below: "Discussion & Decision The conference after discussion and briefing from the officers from the ....