The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad has held that Cenvat Credit of Basic Excise Duty can be utilised for payment of Education Cess and Secondary Higher Education Cess.
The appellant assessee, Welspun Corp Limited, a leading company in the steel industry, was represented by R. Subramanya.
The assessee contended that the utilisation of cenvat credit for education cess and higher education cess had already been established in several judgments, including Mono Steel India Ltd vs. CCE, VVF Ltd vs. CCE, Gallant Metal Ltd vs. CCE, and others and argued that these precedents clearly supported assessee’s position.
The revenue, the respondent, was represented by Superintendent Ajay Kumar Samota, who reiterated the findings of the order.
The two-member bench consisting of Mr. Ramesh Nair (Judicial Member) and Mr C.L. Mahar (Technical Member) observed that the issue had already been settled in various judgments, including the case of M/S ASR Multimetals P. Ltd vs. CCE & ST Rajkot, wherein the Hon’ble Supreme Court had held that education cess was exempted under the area-based exemption notification.
The bench also cited the cases of Mono Steel India Ltd vs. CCE and ASR Multimetals Pvt. Limited & others, which supported the utilisation of cenvat credit for education cess and higher education cess.
The bench, based on the comprehensive examination of previous judgments, concluded that the assessee is indeed entitled to utilise the cenvat credit of basic excise duty for the payment of education cess and secondary higher education cess and thus the decision of the bench aligns with the previous judgments in similar cases.
The bench emphasized that the issue is no longer res integra, as settled by the earlier decisions.
As a result, the order was set aside, and the appeal filed by Welspun Corp Limited was allowed thus reaffirming the right of businesses to utilise available credits for payment of education cess and higher education cess.
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