TaxTMI 
TaxTMI 
2024 (9) TMI 1773
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....Schlumberger Asia Services Ltd Vs. Commissioner - 2021 (5) TMI 954- CESTAT Chandigarh * Emami Cement Ltd Vs. Commissioner 2022 (3) TMI 1254-CESTAT New Delhi * Hindustan Zinc Ltd Vs. Commissioner 2022 (2) TMI 246- CESTAT New Delhi * International seaport Dredging Private Ltd. Vs. Commissioner -2022 (6) TMI 822- CESTAT Chennai * Bharat Heavy Electricals Ltd Vs. Commissioner -2019 (4) TMI 1896 CESTAT New Delhi 3. Shri Rajesh R Kurup, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. On careful consideration of the submission made by both the sides and perusal of record, we find that the Revenue has denied the refund claim on the ground that since the levy of Education Cess and Secondary & Higher Education Cess had been abolished, the appellant was not supposed to retain the credit and carry forward the same. We find that the abolition of Education Cess does not affect the accumulated Cenvat credit which was availed during the time when the Cenvat credit on Education Cess and Secondary & Higher Education Cess was legally available to the appellant. The both the lower authorities have....
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....ced below:- Rule 3. CENVAT credit. - (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; (ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act; (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 ( 40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ( 58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 o....
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....for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty." 5. There is no express prohibition in terms of Rule 5. Even otherwise, it refers to a manufacturer as we see from Rule 5 itself. Admittedly, in the case on hand, there is no manufacture in the light of closure of the Company. Therefore, Rule 5 is not available for the purpose of rejection as rightly ruled by the Tribunal. The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ord....
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....ourt in the case of Luvkush Textiles passed the following decision : "10. In view of the fact that after the cristilization of the claim on account of the Cenvet credit in favour of the assessee, assessee was entitled for the refund of Rs. 63,001/- from the Revenue which is not in dispute. It is also a fact that manufacturing unit of assessee had been closed and the concern of the assessee is not in production any more. Therefore, in view of Rule 5 which is reproduced as under :- "Rule 5. Refund of CENVAT credit. - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the Cenvat credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification: Provided....
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.... no substantial question of law, raised for reference, we are not inclined to ask the Tribunal to refer any issue." 14. Similarly the Karnataka High Court in the case of the Union of India (UOI) represented by the Commissioner of Central Excise v. Slovak India Trading Company Private Limited has held as under :- 4. Admitted facts would reveal of a claim of cash refund and admitted facts would reveal of rejection at the hands of the Assistant Commissioner and also the appellate authority. The Tribunal has chosen to allow the claim application on the ground that refund cannot be rejected when the assessee goes out of Modvat scheme or when the Company is closed. The argument is that there is no provision for refund in terms of Rule 5 of Cenvat Credit Rules, 2002. Rule 5 reads as under? Rule 5. Refund of CENVAT Credit. - When any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final prod....
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.... of Welcure Drugs & Pharmaceuticals Limited (supra) passed the following judgment:- "9. We have heard counsel for the parties. 10. Before proceeding with the matter, it will not be out of place to reproduce Rule 5 of the Central Excise Act which reads as under : "Rule 5. Refund of CENVAT credit. - Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification : Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rule....
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.... High Court and at the most they can refer it back prior to distinguish on facts but no authority has been made. Full Bench decision of the Tribunal has to be followed. 14. Hence, we answer the issue in favour of assessee against the department. 15. The appeal is allowed. The view of Karnataka High Court which has been confirmed by the Supreme Court is required to be approved and the same is approved." 7. In view of the above judgments, it is observed that the issue is no longer res-integra. Accordingly the appellant is entitled for cash refund of accumulated and unutilized Cenvat credit of Education Cess and Secondary and Higher Education Cess. The impugned order is set-aside and the appeal is allowed with consequential relief." 4.2 On the Identical issue in another case at CESTAT Chandigarh in the case of Schlumberger Asia Services Ltd (Supra) Tribunal also taken the same view as under:- "6. I find that the facts of the case are not in disputed that on 01.07.2017, the new regime of GST came into force and on the said date, there was no bar on carry forward of the cenvat credit of Education Cess, Secondary & Higher Education Cess and Krishi K....
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....nal laid down in law That Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess cannot be transferred to GST account and as they were lying unutilized in their cenvat credit account on 30.06.2017, the assesee is entitled to claim the refund thereof. In other words, if the appellant could have filed the refund claim before 30.06.2017 of Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess, the same is admissible to the appellant. The same view has been taken by this Tribunal in the case of M/s Bharat Heavy Electricals Ltd (supra) in para 4, which is reproduced herein below: "4. We have carefully gone through the rival arguments. There is no dispute that on 01/07/2017, the cesses credit validly stood in the accounts of the assessee and very much utilizable under the existing provisions. The appellants could not carry over the same under the GST regime. Thus the appellants were in a position where they could not utilize the same. We agree with learned Counsel of the appellant that the credits earned were a vested right in terms of the Hon'ble Apex Court judgement in Eicher Motors case and will not extinguish with the change of law unless....
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....s carried forward by him in the central excise returns. 11. The submission of learned counsel for the appellant is that refund of credit of cess cannot be denied merely on the ground that such credit which could not be utilised prior to GST regime would stand lapsed. In this connection, learned counsel placed reliance upon the decision of the Tribunal in Slovak India Trading. 12. The Tribunal, in the aforesaid decision rendered in Slovak India Trading held that refund has to be made when an assessee goes out of the Modvat Scheme or when the Company is closed. 13. The appeal filed by the Department before the Karnataka High Court to assail the aforesaid decision of the Tribunal was dismissed and the relevant portion of the judgment is reproduced below: "5. ******* The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of t....
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....d not carry over the same under the GST regime. Thus the appellants were in a position where they could not utilize the same. We agree with learned Counsel of the appellant that the credits earned were a vested right in terms of the Hon'ble Apex Court judgement in Eicher Motors case and will not extinguish with the change of law unless there was a specific provision which would debar such refund. It is also not rebutted by the revenue that the appellants had earned these credits and could not utilize the same due to substantial physical or deemed exports where no Central Excise duty was payable and under the existing provisions, had the appellants chosen to do so they could have availed refunds/ rebates under the existing provisions. There is no provision in the newly enacted law that such credits would lapse. Thus merely by change of legislation suddenly the appellants could not be put in a position to lose this valuable right. Thus we find that the ratio of Apex courts judgment is applicable as decided in cases where the assessee could not utilize the credit due to closure of factory or shifting of factory to a non dutiable area where it became impossibly to use these credits. Ac....
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....s well as the High Court of Karnataka in the case of Slovak India Trading Co. Pvt. Ltd. has held that the assessee is entitled to refund of an unutilized credit of Education Cess and Higher Education Cess after the introduction of GST. ****** 6.1. Further, I find that the Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. (cited supra) has held that when the assessee has moved out of Modvat Scheme/Cenvat Scheme, portion of unutilized credit should be allowed as refund. Since the issue is covered by the decision of the Slovak India Trading Co. Pvt. Ltd. (cited supra) and the same being the decision of a jurisdictional High Court would prevail over decision of other High Courts and the Tribunal as held in the case of CCE & ST Vs. Andhra Sugars Ltd. cited supra and the Larger Bench decision of the Tribunal, Bangalore in the case of J.K. Tyre & Industries Ltd. Vs. Asst. Commissioner of Central Excise wherein the Larger Bench has held that the Tribunal is bound by the decision of the jurisdictional High Court and is not bound by the decision of other High Courts. Further, I find that the two decisions relied upon by the Department in the case of Bha....
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....hether refund could be ordered of unutilised credit on closure of the unit and held, in view of the earlier decision of the Punjab and Haryana High Court in Rama Industries Ltd. vs. CCE, Chandigarh [2009-TIOL-100-HC-P&H-CX] and the decision of the Karnataka High Court in Slovak India, that refund should be granted. The observations of the Punjab and Haryana High Court are as follows: "8. We further find that this court in Rama Industries (Supra) relying upon judgment of Karnataka High Court in the case of Union of India Vs Slovak India Trading Co. Pvt. Ltd. 2006 (201) ELT 559 (Kar) has sanctioned refund of unutilised Cenvat Credit on the closure of factory. Rajasthan High Court in the case of Lav Kush Textiles Vs CCE, Jaipur 2017 (353) ELT 417 (Raj), Welcure Drugs & Pharmaceuticals Ltd. Vs CCE 2018 (15) GSTL 257 (Raj) has formed similar view. High Courts have held that judicial discipline is required to be maintained; Tribunal cannot distinguish High Court judgments and is bound by High Court judgments. However, larger bench of Bombay High Court in the case of Gauri Plasticulture (Supra) has formed a different opinion. It is true that judgment cited by counsel for....
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....9 (11) TMI 278 - Madras HC] to assert that the accumulated credit of EC, SHEC & KKC does not lapse on switchover to the GST regime and could be carried forward as credit under GST. 6. I have carefully considered the judgments relied upon by the both sides. The judgment of the Larger Bench of the Hon‟ble High Court of Bombay was precisely on the point as to whether the assessee can get cash refund of Cenvat credit which they were not able to utilize and it was answered in negative. The Hon‟ble High Court of Madras was examining a different issue as to whether the precision of the credit of EC, SHEC & KKC into the new GST regime was permissible or otherwise. The Hon‟ble High Court of Madras has not dealt with the issue of cash refund of unutilized Cenvat credit which is the question in dispute. In view of the above, I find that there is no legal provision under which the assessee's appeal could be entertained." 22. The aforesaid decision of a learned Member is contrary to the Division Bench judgment of the Tribunal in Bharat Heavy Electricals and was also distinguished by the Tribunal in Kirloskar Toyota. 23. Learned authorised representat....
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....ayment in cash. 26. The judgment in case of SRD Nutrients Private Limited (supra) cited by Learned Counsel for the appellant - assessee has no bearing on the issue at hands, as the facts on record and question posed for consideration before us are entirely different from the facts and issues, which were involved in the case before Hon'ble the Supreme Court. The said judgment of Hon‟ble the Apex Court simply lays down that Education Cess as well as Secondary and Higher Secondary Education Cess are a part of Excise duty. This position of law perhaps cannot be disputed, even the authorities below have not denied claim of refund on such count; they have rather treated the Education Cess and Secondary and Higher Secondary Education Cess to be a duty under the Act of 1944, even while rejecting the assessee‟s claim. 27. In view of the discussion foregoing, we are of the considered opinion that the Tribunal has committed no error of law in holding that the appellant cannot claim cash refund or encashment of the unutilized and unavailed amount of Education Cess and Secondary and Higher Secondary Education Cess, lying in its credit." 24. It is, ther....