In a significant case, the Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that availment of cash refund of accumulated CENVAT credit doesn’t disqualify merely because levy of education cess.
Hubergroup India Pvt Ltd, the assessee was seeking a cash refund of the accumulated and unutilized Cenvat credit for Education Cess and Secondary & Higher Education Cess under Section 142(3) of the CGST Act, 2017, read with Section 11B of the Central Excise Act, 1944.Section 142(3) of the CGST Act, 2017 provides that any refund claims for CENVAT credit, duty, tax, interest, or other amounts paid under existing laws must be processed according to those laws.
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Section 11B of the Central Excise Act, 1944 provides that a person who wants to claim a refund of excise duty and any interest paid on such duty must submit an application to the Principal Commissioner or Commissioner of Central Excise within two years from the relevant date.
The department denied the refund claim on the ground that since the levy of Education Cess and Secondary & Higher Education Cess had been abolished, the assessee was not supposed to retain the credit and carry forward the same.
The Tribunal found that both the lower authorities have misunderstood the abolishing of education cess, the levy of duty and the availment of Cenvat credit are on different yardstick.
The Tribunal held that “Merely because the levy of education cess was abolished, it cannot disentitle an assessee from availing the Cenvat credit on Education Cess and Secondary & Higher Education Cess. Therefore, the accumulation of the Cenvat credit in respect of Education Cess and Secondary & Higher Education Cess was absolutely legal and correct.”
The division bench of Ramesh Nair (Judicial Member) and C L Mahar (Technical Member) has observed 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 assessee. In view of the above, the Tribunal allowed the appeal.
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S Suriyanarayanan appeared for the appellant and Rajesh R Kurup appeared for the respondent.
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