Refund of Cess Credit balance can't be denied for Non-utilisation due to Change in Legislation: CESTAT [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), of Chennai Bench, held that refund of cess credit balance can’t be denied for non-utilisation due to change in legislation.

Shri Mihir Deshmukh appeared for the appellant and Ms K. Komathi appeared for the Respondent

The appellant,International Seaport Dredging Pvt. Ltd is engaged in providing dredging services where they filed a refund claim under section 11B of the Central Excise Act, 1944 for the refund of unutilized CENVAT credit availed on Education cess, Secondary and Higher Education cess and Krishi Kalyan cess.

The appellant had carried forward the CENVAT credit in respect of Education cess, Secondary and Higher Education cess and Krishi Kalyan cess to TRAN-1 after the introduction of GST which was reversed later. The appellant claimed a refund which was rejected by the original authority holding that under section 140 of the CGST Act, 2017, a refund can be sought only for eligible duties which excludes refund of cess. Commissioner (Appeals) upheld the same.

The appellant contended in light of various precedents, in the case ofEicher Motors Ltd. Vs. CCE, High Court held that CENVAT credit as a vested right.

The Tribunal held that the refund claim about Education cess, Secondary and Higher Education cess and Krishi Kalyan cess lying unutilized in the CENVAT account is eligible for refund after the introduction of GST. Further observed that the appellants could not carry over the same under the GST regime and could not utilize the same.

Judicial Member, Ms Sulekha Beevi C.S. observed that a mere change of legislation could not deny the valuable right and set aside the impugned order. The appeal is allowed with consequential reliefs.

To Read the full text of the Order CLICK HERE

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