Custom, Excise & Service Tax Tribunal
Genus Paper & Boards Ltd vs Ce & Cgst Meerut-I on 6 September, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Excise Appeal No.71256 of 2018
(Arising out of Order-in-Appeal No.MRT/EXCUS/000/APPL-MRT/87/2018-19
dated 21/05/2018 passed by Commissioner (Appeals) Central Goods &
Services Tax, Meerut)
M/s Genus Paper & Boards Ltd., .....Appellant
(Ghawanpur, Kanth Road, Moradabad, UP)
VERSUS
Commissioner of Central Excise, Meerut ....Respondent
(Mangal Pandey Nagar, CCS University, Meerut-250005)
APPEARANCE:
Shri R.C. Gupta, Advocate for the Appellant
Shri Sarweshwar T. Khairnar, Authorised Representative for the
Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70082/2023
DATE OF HEARING : 06 September, 2023
DATE OF DECISION : 06 September, 2023
SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal
No.MRT/EXCUS/000/APPL-MRT/87/2018-19 dated 21/05/2018
passed by Commissioner (Appeals) Central Goods & Services
Tax, Meerut. By the impugned order Commissioner (Appeals)
has held as follows:-
"6. I have carefully gone through the facts and records of the
case as well as the submissions made by the appellant. In terms
of the Rule 3 (7) (b) of the Rules, prior to 01.03.2015, Cenvat
Credit of Education Cess, and Secondary and Higher Education
Cess (EC and SHEC) paid on excisable goods could only be
utilized for payment of those cesses payable on the excisable
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Excise Appeal No.71256 of 2018
goods etc. However, with effect from 01.03.2015 all excisable
goods were exempted from payment of EC and SHEC. The Rules
were amended vide Notification No.12/2015-CE(NT) dated
30.04.2015 (hereinafter referred to as the "notification to allow
for the utilization of credit of Education Cess (EC) and
Secondary and Higher Education Cess (SHEC) paid on inputs or
capital goods received in the factory of manufacture of final
product on or after 1st day of March, 2015, for the payment of
the duty of excise leviable under the First Schedule to the
Central Excise Tariff. The contention of the appellant that the
sole intention of the issuance of Notification No: 12/2015-
CE(NT) dated 30.04.2015 is only for allowing utilization of
unutilized Cenvat credit of cesses lying as on 28.02.2015
towards payment of Excise duty is not supported by the
provisions of the Rules. The amendment to the notification does
not deal with the way the balance of EC and SHEC, lying as on
28.2.2015, could be utilized on or after 01.03.2015. The
utilization of the Credit of EC and SHEC lying in balance as on
28.02.2015, for payment of Central Excise duty under the first
Schedule of the Central Excise Tariff Act, 1985, on clearances
effected on or after 01.03.2015, is not in terms of the provisions
of the Rules. The same has, therefore, rightly been demanded
vide impugned order along with interest.
7. Regarding penalty imposed upon the appellant, I find that
the matter involves interpretation of the Rules and notification
regarding utilization of EC and SHEC lying in balance as on
28.02.2015, for payment of Central Excise duty, after the
excisable goods were exempted from levy of EC and SHEC with
effect from 01.03.2015. The credit of EC and SHEC lying in
balance as on 28.02.2015, and that taken in respect of the
goods received on or after 01.03.2015 is in fact the credit of EC
and SHEC paid on the goods prior to 1.3.2015, when the same
was payable. By the amendment in the Rule, as discussed
above, express provision has been made for the utilization of
credit of EC and SHEC, in respect of the goods received on or
after 1.3.2015, for payment of Central Excise duty. The Rule is
silent with respect to the balance of credit available as on
28.2.2015. It has neither been provided that the said credit
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Excise Appeal No.71256 of 2018
would lapse nor has the manner of its utilization been spelt out.
Under the circumstances, the taking of the credit of EC and
SHEC prior to, and on or after 1.3.2015, stands on the same
footing. The amended Rule only specifically provides for the
manner of utilization of credit in respect of the goods received
on or after 1.3.2015. Under the circumstances, the contention of
the appellant and their bonafide belief regarding utilization of
the credit of EC and SHEC lying in balance as on 28.2.2015 for
the same purpose as that taken on or after 1.3.2015 is a matter
of interpretation for which imposition of penalty is not justified.
The CESTAT in the case of Commissioner of Central Excise,
Surat-I Versus Prime Furnishing Pvt Ltd. [2014 (308) ELT 505
(Tri-Ahmd)], have held that where the issue involved is capable
of being interpreted differently, no penalty is imposable. The
penalty imposed upon the appellant is, therefore, set aside."
2.1 Appellant was registered with Central Excise and
manufacturer of Kraft Paper and M S Ingots. He is also availing
the facility of Cenvat credit for payment of duty.
2.2 During the course of inquiry it was found that appellant
had utilized Cenvat credit of Education Cess and Higher
Education Cess amounting to Rs.13,05,381/-, lying in balance as
on 01.03.2015 towards payment of Central Excise duty for the
months of May, 2015 to July, 2015.
2.3 A show cause notice dated 12.05.2016 was issued to the
appellant asking them to show cause as to why-
(i) Cenvat Credit amounting to Rs.13,63,480/- (Rupees Thirteen
Lakh Sixty Three Thousand Four Hundred Eighty Only) should
not be demanded & recovered from them under Rule-14 of the
Cenvat Credit Rules, 2004 read with Section-11A(1) of the
Central Excise Act, 1944.
(ii) Interest on the above amount at appropriate rates should not be
demanded & recovered from them under Rule-14 of the CENVAT
Credit Rules, 2004 read with Section-11AA of the Central Excise
Act, 1944.
(iii) Penalty should not be imposed upon them for contravention of
the aforementioned provisions of law under Rule-15 of the
CENVAT Credit Rules, 2004 read with Section-11AC of the
Central Excise Act, 1944."
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Excise Appeal No.71256 of 2018
2.4 This show cause notice was adjudicated by Assistant
Commissioner of Central Excise, Division Moradabad by holding
as follows:-
"(i) I hereby, confirm the demand of CENVAT Credit amounting to
Rs.7,41,546.00 (Rupees Seven Lacs Forty One Thousand Five
Hundred Forty Six Only) against M/s Genus Paper & Board Ltd.,
Aghwanpur, Kanth Road, Moradabad under Rule-14 of the
CENVAT Credit Rules, 2004 read with Section 11A(1) of the
Central Excise Act, 1944.
(ii) I, hereby, confirm the demand of interest on the said amount
under Rule-14 of the CENVAT Credit Rules, 2004 read with
Section-11AA of the Central Excise Act, 1944.
(iii) I hereby, impose penalty of Rs.74,155.00 (Rupees Seventy Four
Thousand One Hundred Fifty Five Only) against M/s Genus
Paper & Board Ltd., Aghwanpur, Kanth Road, Moradabad under
Rule-15 of the CENVAT Credit Rules, 2004 read with Section
11AC of the Central Excise Act, 1944."
2.5 On appeal, Commissioner (Appeals) vide the impugned
order has modified the Order-in-Original as indicated above in
para-1. Aggrieved appellant has filed this appeal.
3.1 I have heard Shri R.C. Gupta learned Counsel appearing
for the appellant and Shri Sarweshwar T. Khairnar learned
Authorised Representative appearing for the respondent-
revenue.
3.2 Arguing for the appellant learned Counsel submits that
➢ 3rd, 4th & 5th provisos of Notification No.12/2015-CE(NT)
dated 30.04.2015. It is clear by the 3rd proviso in the said
Notification that the utilization of credit by the appellant
for payment of duty cannot be faulted with. In support of
this contention, he referred to some decisions, which are
reproduced below:-
○ Reserve Bank of India Vs Peerless Co.- (1987) 1 SCC
424.
○ Central Bank of India Vs Ravindra & Ors reported in
JT 2001 (9) SC 101.
➢ these proviso's should be interpreted in a manner which
allows utilization of Cenvat credit on Education Cess and
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Excise Appeal No.71256 of 2018
Secondary and Higher Education Cess for payment of
Central Excise duty for the months of May and June, 2015.
Accordingly, he prays for allowing the appeal.
3.4 Arguing for the revenue learned Authorised Representative
supports the impugned order and,-
➢ reiterates the findings recorded therein
➢ relies upon the decision of this Tribunal in the case of M/s
Pushpit Steels Pvt. Ltd. Vs Commissioner of Central Tax,
Tirupati 2019 (27) GSTL 374 (Tri.-Hyd.) and prays for
dismissal of this appeal.
4.1 I have considered the impugned order along with the
submissions made in the appeal and during the course of
argument.
4.2 The issue involved in the present case is not with regards
to the admissibility of Cenvat credit but with regards to the
utilization of Cenvat credit, rightly availed by the appellant in
respect of Education-cess and Higher Education-cess.
Notification No.12/2015-CE(NT) dated 30.04.2015 is reproduced
bellow:-
"2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as
the said rules), in rule 3, in sub-rule (7), in clause (b), after the
second proviso, the following shall be substituted, namely:-
"Provided also that the credit of Education Cess and
Secondary and Higher Education Cess paid on inputs or
capital goods received in the factory of manufacture of
final product on or after the 1st day of March, 2015 can
be utilized for payment of the duty of excise leviable
under the First Schedule to the Excise Tariff Act:
Provided also that the credit of balance fifty per cent.
Education Cess and Secondary and Higher Education Cess
paid on capital goods received in the factory of
manufacture of final product in the financial year 2014-15
can be utilized for payment of the duty of excise specified
in the First Schedule to the Excise Tariff Act:
Provided also that the credit of Education Cess and
Secondary and Higher Education Cess paid on input
services received by the manufacturer of final product on
or after the 1st day of March, 2015 can be utilized for
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Excise Appeal No.71256 of 2018
payment of the duty of excise specified in the First
Schedule to the Excise Tariff Act."
4.3 The above notification amended the Rule 3 (7) (b) of
Cenvat Credit Rules. By insertion and following provisos, the
notification does not provide that Cenvat credit of Education-
cess/ Secondary and Higher Education-cess available with the
appellants as on 28.02.2015 stands lapsed. The said credit is
available with the appellant for utilization of the same for
payment of due Central Excise duty as the the rates of Central
Excise duty were made inclusive of the leviable Education cess
and Secondary and Higher Education cess. It is stated in the
Budget Speech of Hon'ble Finance Minister at para-118, the
same is reproduced bellow:-
"As part of the movement towards GST, I propose to subsume
the Education Cess and the Secondary and Higher Education
Cess in Central Excise duty. In effect, the general rate of Central
Excise Duty of 12.36% including the cesses is being rounded off
to 12.5%."
4.4 The Notification No.12/2015-CE(NT) has been issued
amending the Cenvat Credit Rules as to implement the above
proposed amendment in the rate of duty as per the Hon'ble
Finance Minister's Speech. Accordingly, I agree with the view
that the Notification No.12/2015-CE(NT) dated 30.04.2015
should be interpreted in a manner to fulfill the objective as
highlighted by the Hon'ble Finance Minister in the above stated
Budget Speech. Further it needs to be noted that the notification
number 12/2015-CE (NT) is totally silent on the issue of
accumulated credit of the education cess and higher education
cess available with the appellants as on 01.03.2015, It do not
provide that this credit shall lapse, or cannot be used for
payment of the excise duty in which these cesses have been
subsumed. Hon'ble Supreme Court has in case of Tungbhadra
Industries [2000 (118) ELT 545 (SC)] held as follows:
"8. The question whether the benefits of both the
notifications can be availed of simultaneously was not a
subject matter of consideration before the Gujarat High
Court and in fact the credit accumulated under the
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Excise Appeal No.71256 of 2018
subsequent notification of 11th October, 1989 was not a
matter for consideration at all. That apart, Clause (iii) of
both the notifications, clearly provides that the amount of
credit utilised for payment of duty shall not exceed rupees
one thousand per tonne of vegetable products on any
individual clearance. When the credits get accumulated in
accordance with the rates indicated in the notification itself
then the same can be utilised also in accordance with the
terms and conditions contained in that notification and,
therefore, it is not permissible to construe the judgment of
Gujarat High Court that it has been held therein that the
manufacturer could avail of the credits accumulated under
both the notifications simultaneously. To the said effect
also is the judgment of the Andhra Pradesh High Court on
which Mr. Dave placed reliance. The only thing what both
the High Courts have held is that the rights acquired or
money credit accumulated, is not taken away by rescinding
of the notification in question. In fact the decision of the
Karnataka High Court in the case of Union of India v.
Modern Mills Ltd., 1994 (72) E.L.T. 246 (Kar.) considers
and approves the aforesaid decision of the Gujarat High
Court and Andhra Pradesh High Court and holds that the
accumulated credit would not be ceased with the
rescinding of the notification and on the other hand, could
be utilised by the assessee towards excise duty payable on
its final products thereafter. But it has been further held
that the said accumulated credit could be utilised only
subject to the conditions to the notification and
consequently, it is not open to the manufacturer to insist
on clearing his finished products, without paying any
amount of excise duty by merely effecting two debit
entries of the accumulated credits. In other words, what
has been held by the Karnataka High Court in the aforesaid
decision is that though the manufacturer would be entitled
to utilise the accumulated credits under the rescinded
notification and can also accumulate further credits on the
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Excise Appeal No.71256 of 2018
basis of the fresh notification of the year 1989, but is not
entitled to claim adjustment on the basis of both the
accumulated credits simultaneously. We approve the views
taken by the Karnataka High Court and we further hold
that neither in the decision of the Gujarat High Court not in
the decision of the Andhra Pradesh High Court, anything
contrary has been said, so far as the question of utilisation
of the credit for payment of duty on the manufactured
goods are concerned. In this view of the matter, the Excise
Authorities have rightly dealt with the matter of utilisation
of the accumulated credit in favour of the appellant-
manufacturer and we see no infirmity in the same."
4.5 Hon'ble Kolkata High Court has in case of Rasoi Ltd. [2020
(372) E.L.T. 56 (Cal.)] held as follows:
"5. The question is whether the appellants were entitled
to utilise the unutilised Cenvat credit in the manufacture of
a final product other than the final product for which the
inputs were utilised?
6. The appellants who were the writ petitioners want the
answer to the question in an affirmative from this Court.
They are aggrieved by the judgment and order of this
Court dated 20th June, 2018 passed in WP 29003 (W) of
2016 (M/s. Rasoi Limited & Anr. v. Union of India &
Others) virtually dismissing the writ application.
7. Mr. Chatterjee cites the Supreme Court judgment in
the case of Collector of Central Excise, Pune v. Dai Ichi
Karkaria Ltd. reported in 1999 (112) E.L.T. 353 (S.C.)
where the Supreme Court on its interpretation of sub-rule
(1) of Rule 57A of the said Rules delivered its judgment,
the relevant parts of which are set out herein :-
"It is clear from these Rules, as we read them, that a
manufacturer obtains credit for the Excise duty paid on
raw material to be used by him in the production of an
excisable product immediately it makes the requisite
declaration and obtains an acknowledgement thereof. It is
entitled to use the credit at any time thereafter when
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Excise Appeal No.71256 of 2018
making payment of excise duty on the excisable product.
There is no provision in the Rules which provides for a
reversal of the credit by the excise authorities except
where it has been illegally or irregularly taken, in which
event it stands cancelled or, if utilised, has to be paid for.
We are here really concerned with credit that has been
validly taken, and its benefit is available to the
manufacturer without any limitation in time or otherwise
unless the manufacturer itself chooses not to use the raw
material in its excisable product. The credit is, therefore,
indefeasible. It should also be noted that there is no co-
relation of the raw material and the final product; that is to
say, it is not as if credit can be taken only on a final
product that is manufactured out of the particular raw
material to which the credit is related. The credit may be
taken against the excise duty on a final product
manufactured on the very day that it becomes available."
8. The ratio of this case was approved by the Supreme
Court in the recent decision of Commissioner of Central
Excise, Patna v. New Swadeshi Sugar Mills reported in
2015 (323) E.L.T. 222 (S.C.).
9. Mr. Ganguli for the respondents argued that in the
above judgments the Notification 45/89-C.E., dated 11th
October, 1989 was not under consideration. The relevant
part of the said notification is as follows :-
"(iii) The quantity of credit utilised for payment of duty on
any individual clearance of the said final products shall not
exceed rupees one thousand per tonne of vegetable
products cleared and the excess credit, if any, available in
the credit account shall not be refunded to the
manufacturer or adjusted against or utilised for payment of
duty on any excisable goods under any other
circumstances".
10. To counter this argument Mr. Chatterjee showed us a
decision of a Learned Single Judge of this Court in Rasoi
Limited & Anr. v. Union of India & Ors. reported in 2004
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Excise Appeal No.71256 of 2018
(176) E.L.T. 101 (Cal.) which related to the self same
notification. Paragraph No. 14 of this judgment is very
important and is set out hereinbelow :-
"Regarding the other objection of the respondents as
regards relocation of the factory, after going through the
provisions contained in Rules 57K to 57P and 174 of the
Central Excise Rules, relied upon by Mr. Banerjee, I find
that according to those provisions, goods cannot be
manufactured without a licence. Those provisions demand
that the manufacturing premises are to be specified in the
plan while making application for licence. The licence
authorises the licence holder to undertake manufacturing
operation at the premises mentioned in the registration
certificate. If one wants to operate manufacturing process
from more than one premise, separate registration is to be
made for each of those premises. The object of such
separate registration is to ensure proper supervision by the
Inspectors for proper accounting of the credit, goods
manufactured, assessment of duty, etc. in respect of the
goods produced at different places. But scheme granting
money-credit did not require that such credit is to be
utilised only for the payment of duty by the manufacturer
in respect of goods produced at the same unit and not at
the different units maintained by the same manufacturer.
Such right really accrues to the asset and it passes to the
person who owns such asset. Thus, it is preposterous to
suggest that a manufacturer cannot get the credit benefit
in respect of the goods manufactured at his different units
and such benefit should be limited to the duty payable and
the production of the self same unit. I, therefore, hold that
there is no impediment in getting adjustment of the money
credit accrued in respect of the goods manufactured at
New Alipore towards duty payable for the goods produced
at the Bangannagar factory. It may not be out of place to
mention here that both the aforesaid factories are
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Excise Appeal No.71256 of 2018
registered and licensed. The aforesaid question is, thus,
answered in favour of the petitioner no. 1."
"The second writ application being W.P. No. 983(W) of
2003, thus, succeeds. Let there be orders in terms of
prayers (a) and (b) of the writ application."
"No costs."
11. Therefore, the situation is like this.
12. The Supreme Court in the case of Dai Ichi Karkaria
Ltd. on consideration of Rule 57A sub-Rule (1) of the said
rules had opined that the unutilised Cenvat credit on the
inputs could be utilised for any other final product. This
was approved in the New Swadeshi Sugar Mills case by the
same Court.
13. This Court on consideration of the notification dated
11th October, 1989 had ruled that Cenvat credit could be
utilised in any unit of the same manufacturer. It did not lay
down any ratio that the two final products could be
different. It only said that manufacture could take place in
different units of the same manufacturer. The above
Supreme Court decision on consideration of substantive
Rule 57A sub-rule (1) has pronounced the dicta that
Cenvat credit can be utilised for manufacture of any final
product of the same manufacturer. But that case was not
concerned with the said notification dated 11th October,
1989.
14. In those circumstances, we are of the opinion that
the respondents should consider the request of the
appellants made by the letter dated 18th October, 2016
read with the departmental reply dated 11th November,
2016 in a proper proceeding constituted by the
respondents, attended by the appellants and the
departmental representatives, hearing them, taking into
account the above decisions and the observations made
above in the judgment and any other decision or decisions
cited by the portion by a reasoned order within 4 months
of communication of this order."
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Excise Appeal No.71256 of 2018
This decision has been affirmed by the Hon'ble Apex Court
as reported at [2021 (377) ELT 466 (SC)].
4.6 In view of the above decisions I am clearly of the view that
the CENVAT credit of Education Cess and Secondary & Higher
Education Cess which was available in the books of accounts of
the appellant would not have been lapsed without specific
provisions being made in law for lapsing the same. It is also
worth noting that the in terms of Section 37 (2) (xxviii):-
"Section 37. Power of Central Government to make rules. -
(1) The Central Government may make rules to carry
into effect the purposes of this Act.
(2) In particular, and without prejudice to the generality of
the foregoing power, such rules may -
(xxviii) provide for the lapsing of credit of duty lying
unutilised with the manufacturer of specified excisable
goods on an appointed date and also for not allowing such
credit to be utilised for payment of any kind of duty on any
excisable goods on and from such date."
Nothing has been bought on record whereby Central
Government has in exercise of this power made any such rules
whereby the accumulated-unutilized credit of Education Cess or
Secondary and Higher Education Cess with the appellant could
have lapsed on the on 01.03.2015 i.e. when these cesses were
subsumed in excise duty, or they could not have been utilized for
the payment of any kind of duty. In absence of any such
notification or legal provision for which necessary power existed
in the Central Excise Act, 1944, I am of the view that utilization
of the credit by the appellant towards payment of duty cannot be
faulted with.
4.7 Even if the above is not agreed too, then also the appellant
could not have been asked to pay the same duty twice. If the
demand of duty made was to be confirmed against the appellant,
as has been done by the impugned orders the re-credit of the
same should have been allowed on the Cenvat account of the
appellant simultaneously and as per the provisions of CGST Act
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Excise Appeal No.71256 of 2018
contained in Section 142 (7) this amount would have to be
refunded in cash to the appellants. The said provision of CGST
Act is reproduced below:
"(7) (a) every proceeding of appeal, review or reference
relating to any output duty or tax liability initiated whether
before, on or after the appointed day under the existing
law, shall be disposed of in accordance with the provisions
of the existing law, and if any amount becomes
recoverable as a result of such appeal, review or reference,
the same shall, unless recovered under the existing law,
be recovered as an arrear of duty or tax under this Act and
the amount so recovered shall not be admissible as input
tax credit under this Act.
(b) every proceeding of appeal, review or reference
relating to any output duty or tax liability initiated
whether before, on or after the appointed day under
the existing law, shall be disposed of in accordance
with the provisions of the existing law, and any
amount found to be admissible to the claimant shall
be refunded to him in cash, notwithstanding
anything to the contrary contained under the
provisions of existing law other than the provisions
of sub-section (2) of section 11B of the Central
Excise Act, 1944 and the amount rejected, if any,
shall not be admissible as input tax credit under this
Act."
Accordingly, the entire exercise of making this demand will
be countered by the said provisions of the CGST Act and even if
this amount is recovered in cash from the appellant
simultaneously, the same should be refunded in cash to him, as
per the above said provisions of CGST Act.
4.8 Similar view has been expressed by the Hon'ble Madras
High Court in case of Sutherland Global Services Pvt. Ltd. [2019
(30) G.S.T.L. 628 (Mad.)]
"17. In the present case, the scheme of Section 140
nowhere provides for utilisation of EC, SHEC and KKC. The
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Excise Appeal No.71256 of 2018
Learned Counsel for the Revenue points out that with the
abolishing of EC, SHEC and KKC in 2015 and 2016
respectively, the levy as well as availment of credit in
regard to the aforesaid cesses has been removed from the
sweep of the Act. To a pointed query from the Bench as to
why the assessee was permitted to carry forward the
credit manually in Cenvat register, the Revenue would only
state, while admitting the aforesaid as a fact, that that by
itself would not be a determinating factor as to the proper
utilisation of the credit. The Revenue relies on the
following cases :
(1) M/s. Osram Surya P. Ltd. v. Commissioner of
Central Excise, Indore [2002 (142) E.L.T. 5 (S.C.)]
(2) Union of India (UOI) and Ors. v. Uttam Steel Ltd.
reported in [2015 (4) AIR 505 = 2015 (319) E.L.T. 598
(S.C.)]
(3) Jayam and Co. v. Assistant Commissioner and Ors.
reported in AIR 2016 SC 4443
(4) ALD Automotive Pvt. Ltd. v. The Commercial Tax
Officer and Ors. reported in AIR 2018 SC 5235 = 2018
(364) E.L.T. 3 (S.C.)
(5) Cellular Operators Association of India and Others v.
Union of India and Another [2018 (14) G.S.T.L. 522 (Del.)]
(6) JCB India Limited v. Union of India and Others
[2018 (15) G.S.T.L. 145 (Bom.)].
18. Having heard the rival contentions, I am of the view
that the claim of the petitioner is liable to be accepted.
Goods and Services Tax was introduced with much fanfare
in 2017 with discussions preceding the enactment nearly
from 2009 onwards. The scheme of Goods and Services
Tax (GST) was to provide a comprehensive indirect tax
levy subsuming various indirect tax enactments that had
been in force prior thereto. Empowered committees were
set up to deliberate extensively on the various details of
the GST model to be implemented after taking into
account the views of the State and Central Governments.
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Excise Appeal No.71256 of 2018
The first discussion paper on GST in India set out the
salient features that were incorporated in the report of the
Thirteenth Finance Commission issued in December, 2009.
Prior to enumerating the Central and the State taxes to be
integrated with GST the outline of the model was itself set
out in paragraph-5.25 of the report as follows :-
'Thirteenth Finance Commission
2010-2015
Volume I : Report
December, 2009
.........
The Model GST Outline of the Model GST 5.25 Keeping in mind the recommendations of the task force, we outline the design and modalities of a model GST law. Such a model GST would not distinguish between goods and services. It should be levied at a single positive rate on all goods and services. Exports should be zero- rated. Tax compliance costs should be low and tax credits should be vailable seamlessly across tax jurisdictions. The other design and operational modalities of a model GST are outlined below....."
19. The taxes that had been subsumed were many and included among others, Central Excise, Additional Excise, Additional Customs Duty, all Central and State surcharges and cesses, Value Added Tax, Central Sales Tax, Entry Tax, Luxury Tax, Taxes on lottery, Entertainment Tax, Purchase Tax, State Excise Duties, Stamp Duty, Taxes on vehicles, Tax on goods and passengers, Taxes and duties on electricity as well as service tax. While integrating the taxes, the intention of the Government was evidently to provide a seamless model for transitioning of all credits hitherto availed of by an assessee under the erstwhile VAT and other indirect tax levies to the Goods and Services Tax regime as well. The benefits that had been made available 16 Excise Appeal No.71256 of 2018 and that had been permitted to continue in the erstwhile taxing regime were thus meant to be continued.
20. EC was introduced in 2004, SHEC in 2007 and KK Cess in 2016. Upon introduction of the levy of EC in 2004, Section 95 of Finance Act, 2004 provided that EC would be levied in addition to service tax on taxable services and could be availed of and utilised against payment of EC alone. Likewise for SHEC, introduced in 2007, it was made clear that the benefits of SHEC on input were available to be utilised only as against the respective payments alone and not on the payment of excise duty or service tax on manufactured goods or taxable services. Likewise for KK cess.
21. Both EC and SHEC were abolished with effect from 1- 6-2015 and consequently the unutilised credit of EC and SHEC available could not be set off and accumulated. As far as KK cess is concerned there was no specific notification providing for its abolishing. However, since the CGST Act did not provide specifically for the levy of KK cess, as such there was no avenue to claim the same after 1-7-2017. In all three of the aforesaid cases the unutilised portion of EC, SHEC and KKC continued in the electronic credit ledgers of assessees, but could not be practically utilised in the absence of an enabling provision.
22. This issue can be clinched in favour of the petitioners for two reasons. The impugned order proceeds on the basis that the petitioner has no entitlement to claim set off of credit and thus denies it. However, such credit continues to be available till such time it is expressly stated to have lapsed. Lapsing is not a concept unknown to the respondents. In fact, there are multiple instances where the Board/Government provides for specified credits to lapse mentioning the exact point in time when the lapsing would commence and/or stipulating other conditions in this regard.
17Excise Appeal No.71256 of 2018
23. That the authorities are conscious of the provisions for lapsing of credit, having utilised them in several situations and instances, is clear from the following instance :
'F. No. 137/72/2008-CX.4, dated 21-11-2008 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Utilization of accumulated Cenvat credit restricted in terms of erstwhile Rule 6(3)(c) of Cenvat Credit Rules, 2004 - Regarding.
Kindly refer to your letter C. No. 715/Hqrs/Audit/08, dated 20-11-2008 on the subject mentioned above wherein the issue of utilization of accumulated Cenvat credit has been raised.
The matter has been examined and the following points emerged during its consideration.
Prior to 1-4-2008 [before the amendment in Rule 6(3)] the option available to the taxpayer, under rule 6(3), was that, he was allowed to utilize credit only to the extent of an amount not exceeding 20% of the amount of service tax payable on taxable output service. However, there was no restriction in taking Cenvat credit and also there was no provision about the periodic lapse of balance credit. This resulted in accumulation of credit in many cases.
W.e.f. 1-4-2008, under the amended rule 6(3), the following options are available to the taxpayers not maintaining separate accounts;
(i) Option No. 1 - In respect of exempted goods, he may pay an amount equal to 10% of the value of exempted goods; and in respect of exempted/non-taxable services, he may pay an amount equal to 8% of the value of such exempted/non-taxable service;
OR 18 Excise Appeal No.71256 of 2018
(ii) Option No. 2 - He may pay an amount equivalent to Cenvat credit attributable to inputs and input services attributable to exempted goods and non-taxable/exempted services.
As stated earlier, may taxpayers had accumulated Cenvat credit balance as on 1-4-2008. The matter to be considered was whether this credit balance should be allowed to be utilized for payment of service tax after 1-4- 2008.
As no lapsing provision was incorporated and that the existing Rule 6(3) of the Cenvat Credit Rules does not explicitly bar the utilization of the accumulated credit, the department should not deny the utilization of such accumulated Cenvat credit by the taxpayer after 1-4-2008. Further, it must be kept in mind that taking of credit and its utilization is a substantive right of a taxpayer under value added taxation scheme. Therefore, in the absence of a clear legal prohibition, this right cannot be denied. Pending issues may be decided accordingly.'
24. In the present case, admittedly, there is no notification/circular/instruction that has expressly provided that the credit accumulated would lapse. Not only this, the credit has been carried forward manually and reflected in the returns from time to time and such accumulated credits stare the Revenue in the face. Having permitted the assessee to carry forward the credit, the authorities cannot now take a stand that such credit is unavailable for use. The provisions of sub-section (1) read with sub-section (8) of Section 140, and the Explanation thereunder make it more than clear that all available credit as on the date of transition would be available to an assessee for set off.
25. The Full Bench of the Supreme Court, in fact, makes this position clear in the case of Eicher Motors and Another v. Union of India and Others [1999 (106) E.L.T. 3] while considering the applicability of Rule 57F. The aforesaid Rule provided for the lapse of credit lying unutilised as on 19 Excise Appeal No.71256 of 2018 16-3-1995 stating clearly that such credit would not be allowed to be utilised for payment of duty on any excisable goods, whether cleared for home consumption or export. The proviso to the Rule clarified that such lapsing would not affect credit of duty, if any, in respect of inputs lying in stock or contained in finished products lying in stock on 16-3-1995. The Bench opined that Modvat credit lying to the balance of an assessee represented a vested right accrued or acquired by the assessee. The right in respect of the credit had become absolute at that point when the input was used in the manufacturing of the final product.
26. The Bench stated that when, on the strength of the available Rules and Regulations, certain acts were carried out, all logical consequences must follow in sequence. If any alteration is brought about to this Scheme, then it would have a deleterious effect. The alteration of a credit scheme loses sight of fact that the provision for facility of credit is as good as tax paid till such time the taxes are adjusted on future goods on the basis of commitments made commercially by the assessee. Thus, altering a scheme of credit would affect the rights of the assessee. The impugned Rule was thus quashed, the Bench stating that it cannot be applied to goods manufactured prior to 16-3-1995, where duty payment stood discharged and credit available for further manufacture.
27. The relevant observations are extracted hereunder :
'5. ....... As pointed out by us that when on the strength of the rules available certain acts have been done by the parties concerned, incidents following thereto must take place in accordance with the scheme under which the duty had been paid on the manufactured products and if such a situation is sought to be altered, necessarily it follows that right, which had accrued to a party such as availability of a scheme is affected and, in particular, it loses sight of the fact that provision for facility of credit is as good as tax paid till tax is adjusted on future goods on the basis of the 20 Excise Appeal No.71256 of 2018 several commitments which would have been made by the assessee concerned. .....
6. We may look at the matter from another angle. If on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the rule cannot be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods.' The ratio of this judgment is directly applicable to the facts and legal position before me.
28. Great reliance has been placed by the Revenue upon the decision of the Division Bench of the Delhi High Court in the case of Cellular Operators Association of India and Others v. Union of India and Another [W.P. (Civil) No. 7837 of 2016, dated 15-2-2018] [2018 (14) G.S.T.L. 522 (Del.)]. At Paragraph 5, the Bench records the crux of the petitioners' case as follows :
'5. ........ The contention is that EC and SHE, which were earlier imposed and then withdrawn from 1st March, 2015 and 1st June, 2015 for excisable goods and taxable services respectively, had been submitted and included in the excise duty and service tax, and therefore, the amount lying in the credit towards EC and SHE should be available for availing CENVAT credit. ..........." The arguments stood rejected in the following terms :21
Excise Appeal No.71256 of 2018
16. The decision in the case of Eicher Motors Limited and Another (supra) is distinguishable, for in the said case, what was subject matter of challenge was Rule 57F(4A), which had stipulated that unutilized credit as on 16th March, 1995 lying with the manufacturers of tractors under Heading 87.01 or motor vehicles 87.02 and 87.04 or chassis of tractors or motor vehicles under Heading 87.06 shall lapse and shall not be allowed to be utilized for payment of duty on excisable goods. The proviso, however, had stipulated that nothing shall apply to the credit of duty, if any, in respect of inputs lying in stock or contained in finished products lying in stock as on 16th March, 1995, thereby creating an anomalous situation.
Credit of tax paid on inputs and even finished products was available, but not in respect of the sold products. This was clearly taking away a vested right in the form of an amendment to the Rule. There was lapse of credit, which could not be utilized, though the tax/duty had not been withdrawn. The Supreme Court noticed that the credit attributable to inputs had already been used in manufacture of final products that had been cleared, and this alone was sought to be lapsed, notwithstanding the fact that the right had become absolute. On a holistic reading of the entire scheme, it was observed that when acts have been done by the parties concerned on the strength of the Rules, incidence following thereto must take place in accordance with the scheme or the Rules, otherwise it would affect the rights of the assessees. Further, right had accrued on the date when the assessee had paid tax on the raw materials or inputs and the same would continue till the facility available thereto got worked out or until the goods existed. As noticed above, tax/duty had not been withdrawn. Lastly and more importantly, Section 37 of the Central Excise Tariff Act, 1985 did not enable the authorities to make the Rule impugned therein. The legal ratio in Eicher Motors Limited and Another 22 Excise Appeal No.71256 of 2018 (supra) was followed in Samtel India Limited (supra) wherein amended Rule 57F(17) of the Central Excise Rules, 1944 was challenged. The Rules had postulated lapsing of credit in case of manufactured goods falling under sub-heading 8540.12, though the proviso had provided for credit of duty in respect of inputs lying in stock or contained in finished goods lying in stocks. It was held that the said scheme of credit of input tax, in view of amended provision, could not be made applicable to goods which had already come into existence and under which the assessee had claimed credit facility. As noticed above, in the present case, credit of EC and SHE could be only allowed against EC and SHE and could not be cross-utilized against the excise duty or service tax. In fact, what the petitioners seek is an amendment of the scheme to allow them to take cross utilization of the unutilized EC and SHE upon the two cesses being withdrawn against excise duty and service tax, though this was not the position even earlier. Both EC and SHE were withdrawn and abolished. They ceased to be payable. In these circumstances, it is not possible to accept the contention that a vested right or claim existed and legal issue is covered against the respondents by the decision in Eicher Motors Limited and Another (supra) and Samtel India Limited (supra). The said decisions are distinguishable and inapplicable.
29. Reliance on the case of Cellular Operators Association of India (supra) does not advance the case of the Revenue. The Division Bench in that case was concerned with a prayer for quashing Notification dated 29-10-2015 and for a direction that the credit accumulated on account of EC and SHEC be permitted to be utilised for payment of service tax on telecommunication services. The Bench, right at the outset, at Paragraph 3, highlights the 'accepted and admitted case that benefit of EC and SHEC on inputs etc. could not have been utilised for payment of excise duty/service tax on the output, i.e., manufactured 23 Excise Appeal No.71256 of 2018 goods or taxable services'. Thus the premise on which the Bench has proceeded is that cross utilisation of EC and SHEC as against excise duty or service tax was impermissible in the context of the provisions and rules extant then.
30. The claim of the petitioner before the Delhi High Court was that a vested right to avail the benefit of unutilised EC or SHEC credit was available as on 1-3-2015 and 1-6-2015 as against payment of tax on excisable goods and services. Simultaneous therewith the petitioners also challenged Instruction dated 7-12-2015 that provided as follows :
B.21 - Hyderabad, Coimbatore, Vadodara, Vishakhapatnam, Delhi Zone - Cenvat Credit - Balance of Education Cess and Secondary & Higher Education Cess lying in the CENVAT Credit Account :
Issue :
Exemption from levy of Education Cess and Secondary & Higher Education Cess has been provided w.e.f. 1-3-2015 vide notification no. 14/2015-C.E. & 15/2015-C.E., both dated 1-3-2015, Sub-rule (7)(b) of Rule 3 of CENVAT Credit Rules, 2004, specifies that CENVAT credit of specified duties shall be utilized for payment of those specified duties only. CENVAT Credit of Education Cess and Secondary & Higher Education Cess can be utilized only for payment of Education Cess and Secondary & Higher Education Cess, respectively. Consequent upon grant of exemption there is issue of utilization of the accumulated credit of the past. It is suggested that an amendment to sub-rule (7)(b) of Rule 3 of CENVAT Credit Rules, 2004 may be made to allow the utilization of balance CENVAT Credit of Education Cess and Secondary & Higher Education Cess towards payment of either duty of excise or Service Tax.
Discussion & Decision The conference after discussion and briefing from the officers from the Board noted that it was 24 Excise Appeal No.71256 of 2018 Government's conscious policy decision to withdraw the Education Cess and Secondary & Higher Education Cess. It is a policy decision to not allow utilization of accumulated credit of education cess and secondary and higher education cess after these Cesses have been phased out. As these Cesses have been phased out and no new liability to pay such Cess arises, no vested right can be said to exist in relation to the accumulated credit of the past. The rule and notifications as they exist need to be followed and do not need any amendment?
31. The argument advanced by the parties was crystallised at Paragraph 5 of the decision to the effect that though the levy on EC and SHEC itself been abolished, they had been 'subsumed' within the rate of tax itself, since the rate of service tax had increased to 12%-14% and excise duty from 12% to 12.50%. Thus according to them since the cesses had been subsumed into the basic tax/duty rate, they should be allowed to set off the accumulated credit of EC and SHEC against the same.
32. This argument was rejected by the Division Bench, that held, after analysing the judgments of the Supreme Court in the case of (i) Hingir-Rampur Coal Company Limited and Others v. State of Orissa and Others [(1961) 2 SCR 537], (ii) B.K. Industries and Others v. Union of India and Others [1993 Supp (3) SCC 621 = 1993 (65) E.L.T. 465 (S.C.)], (iii) Shashikant Laxman Kale and Another v. Union of India and Another [(1990) 4 SCC 366], (iv) Tarlochan Singh Flora v. Wakom (Heathrow) Ltd. ([2006] EWCA Civ 1103, Brooke LJ), that though cess may be of the nature of tax and not a fee, it would not be proper to treat either of the cesses as excise duty or service tax. The two cesses on the one hand and excise duty and service tax on the other were always to be treated as different and separate and cross utilisation was, according to the Bench, never permitted. Thus the use of the word 'subsumed' by the then Finance Minister, upon which great reliance was 25 Excise Appeal No.71256 of 2018 placed by the petitioners, was held not to be determinative of the true object of the legislation.
33. In summary, the Division Bench rejected the prayer of the petitioners to quash notification dated 29-10-2015 denying them the direction sought.
34. I have carefully read the aforesaid decision relied upon by the Revenue. The decision and the observations made therein have to be seen in the context of the prayer advanced in that case and in the light of the statutory provisions/rules existing at the relevant point in time.
35. Firstly, the Instructions issued by the Central Board of Excise and Customs dated 7-12-2015, reveal a policy decision, not to allow utilisation of accumulated credit of EC and SHEC, but nowhere states that the credit has lapsed. The Board only says that the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 which stipulates that Cenvat credit shall be utilised only as against payment of specified duties. The request of the petitioner in that case has to be seen in this perspective and specifically in the light of the embargo placed by Rule 3(7)(b) as aforesaid. The Board could well have stated even at that juncture that the credit lapsed, but did not choose to do so.
36. Then again, the Division Bench while considering the rival contentions of the assessee and the Revenue has not anywhere indicated that the credit has lapsed, but only that, in the light of the embargo placed by Rule 3(7)(b), set off/credit as claimed could not be permitted.
37. Thirdly, even after the decision of the Division Bench, there has been no instructions/notification/circular from the Board till date to state that the accumulated credit has lapsed. Thus though there were a good many occasions that presented themselves to the Board to clearly stipulate that the accumulated credit had lapsed, this was not done.
26Excise Appeal No.71256 of 2018 The petitioner had been permitted to carry forward the cesses in question without any move whatsoever to state that the credits could not be so carried forward, since they had lapsed. Not having done so, the provisions of Section 140 should be given full effect and meaning.
38. The Revenue has placed reliance upon the conclusions of the Supreme Court in the cases of (i) Jayam and Co. v. Assistant Commissioner and Ors. (AIR 2016 SC 4443) and (ii) ALD Automotive Pvt. Ltd. v. The Commercial Tax Officer and Others [AIR 2018 SC 5235 = 2018 (364) E.L.T. 3 (S.C.)], to state that the grant of ITC cannot be sought for as a right by an assessee and no such right vests in an assessee.
39. There is a material distinction between the cases relied upon by the Revenue and the case before me. In Jayam and Company and ALD Automotive Pvt. Ltd. (supra), the Court was concerned with a claim of Input Tax Credit (ITC) by an assessee. It is in this context that the Benches state that the grant of ITC is a concession which is not admissible to all kinds of sales. Specified transactions are alone entitled to the benefit of ITC on specified situations and that too, upon satisfaction of conditions imposed. Thus no vested right could be claimed by an assessee in that regard.
40. In the present case, the situation is entirely different. The assessee only avails utilization of the credit accumulated, particularly since there is no prohibition in this regard either for the accumulation itself or for the utilization thereof under CGST.
41. A certain amount of planning and strategizing is undertaken by an assessee bearing in mind the credits and concessions available as well as liabilities imposed by a taxing statute at any given point in time. The credit available in regard to EC, SHEC and KKC are no different. In strategising and conducting its business, the assessee would certainly have taken into account that credit was 27 Excise Appeal No.71256 of 2018 available for set-off against output tax liability. Such credit accumulated has not been stated to have lapsed. The impugned action of the assessing authority in rejecting the claim has however the consequence of insertion of a Rule/Regulation to this effect, which, in my view, is impermissible.
42. A fiscal statute has to be read and understood, as seen. The interpretation should be on the basis of what is apparent, apart from being strict. These are settled principles that need no reiteration, nor support of case law. If one were to apply these propositions to the case on hand, the provisions of Section 140(1) provide for the transfer of all credits and levies, barring those set out in the proviso, which is, (i) where the said amount of credit is inadmissible as ITC (ii) where an assessee has not furnished returns required under the existing law for six preceding months or (iii) where the said credit relates to goods manufactured and cleared under exemption notifications. These are the only three conditions/embargos that bar the transfer of accumulated credit. The language of Section 140(1) and (8), both make it clear that an assessee to GST is entitled to transition of 'the amount of Cenvat credit carried forward in the return relating to the period ending with the date preceding the appointed date' and this in the present case includes accumulated credit of EC, SHEC and KKC.
43. Section 140(8) which specifically deals with centralised registration also provides for transitioning of credit conditional upon an original or revised return being filed within three months of the appointed date reflecting a carry forward of the credit from the closing balance available. The intention, to my mind, is clear, to the effect that the credit reflected in the earlier returns is sought to be permitted to be transitioned, except if specifically barred. The other two conditions under Section 140(8) are that the credit should be admissible as ITC and that credit 28 Excise Appeal No.71256 of 2018 is freely transferrable inter se the units under centralised registration. These conditions also do not stand in the way of the claim of the petitioner.
44. Thus, in my view, the Revenue has not made out any bar for the transitioning of EC, SHEC and KKC into the GST regime and the petitioner satisfies all conditions both under sub-sections (1) and (8) of Section 140. The embargo placed by Rule 3(7)(b) is long gone with the introduction of GST. Certainly the powers-that-be are conscious of these factors in drafting the new legislation and the specific provision in question i.e., Section 140.
45. Reliance placed by Ms. Nandakumar upon the decision in the case of Union of India and Others. v. Uttam Steel Ltd. [(2015) 13 SCC 209 = 2015 (319) E.L.T. 598 (S.C.)] does not impress. In Uttam Steel (supra) a Division Bench of the Supreme Court considered a claim for rebate. Originally and as per prevailing law, an assessee was required to file a claim for rebate within six months from the date of shipment. Admittedly, the claims were filed beyond the period of six months. Thereafter, Section 11B was amended on 12-5-2000, extending the period of limitation from six months to one year. The benefit of extension of time as sought by the assessee was granted and the assessee's appeal allowed. In appeal before the Supreme Court, the Bench held that the timeline of six months had expired on 20-11-1999 and 10-12-1999 respectively, whereas, the claims had been filed only on 28-12-1999. The provisions of amended 11B were held not to be applicable to revive a claim that was already beyond time. The Bench noted that the amendment would ordinarily be retrospective in nature. Thus the benefit of one year for filing claim for rebate would be available from 12-5-2000 when the limitation was extended from six months to 12 months. Moreover, the proviso had been added in the section itself to the effect that the amended 29 Excise Appeal No.71256 of 2018 provision would not have the effect of bringing to life a dead claim.
46. The judgments in the case of S.S. Gadgil v. Lal and Co. (AIR 1965 SC 171), J.P. Jani, Income Tax Officer v. Induprasad Devshanker Bhatt (AIR 1969 SC 778), New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840], T. Kaliamurthi v. Five Gori Thaikkal Wakf [(2008) 9 SCC 306], Thirumalai Chemicals Ltd. v. Union of India [(2011) 6 SCC 739 = 2011 (268) E.L.T. 296 (S.C.)] and Mafatlal Industries Ltd. v. Union of India [(1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] were cited by the Supreme Court in allowing the Revenues' appeal and holding that a dead claim could not be revived by a subsequent benefit.
47. Thus the Revenue argues that the accumulated credit of EC, SHEC and KKC is dead and gone and there is nothing that the assessee could claim as having been carried forward. This argument is rejected. At the risk of repetition, accumulated credit cannot be said to have been wiped out unless there is a specific order under which it lapses. Though there may be embargoes placed by the Statutes and Rules, such as the embargo against cross- utilisation placed by Rule 3(7)(b) of the CCR, the accumulated credit continue in the books of the assessee till specifically wiped out.
48. Finally, the Central Goods and Services Tax Act, 2017 has seen several amendments. Section 28 of CGST (Central Goods and Service Tax) Amendment Act, 2018 proposes the following amendment, which is reproduced below in entirety.
28. In section 140 of the principal Act, with effect from the 1st day of July, 2017, -
(a) in sub-section (1), after the letters and word "CENVAT credit", the words "of eligible duties" shall be inserted and shall always be deemed to have been inserted;
30
Excise Appeal No.71256 of 2018
(b) in the Explanation 1 -
(i) for the word, brackets and figures "sub-sections (3),
(4)", the word, brackets and figures "sub-sections (1), (3), (4)" shall be substituted and shall always be deemed to have been substituted;
(ii) clause (iv) shall be omitted and shall always be deemed to have been omitted;
(c) in the Explanation 2 -
(i) for the word, brackets and figure "sub-section (5)",
the words, brackets and figures "sub-sections (1) and (5)"
shall be substituted and shall always be deemed to have been substituted;
(ii) clause (iv) shall be omitted and shall always be deemed to have been omitted;
(d) after Explanation 2 as so amended, the following Explanation shall be inserted and shall always be deemed to have been inserted, namely : -
'Explanation 3. - For removal of doubts, it is hereby clarified that the expression "eligible duties and taxes"
excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.'.
49. Significantly, Explanation (3) which clarifies that the expression 'eligible duties and taxes' excludes any cess not specified in Explanation (1) or (2), has not been notified."
4.9 The decision of this Tribunal in the case of M/s Pushpit Steel Pvt. Ltd. relied upon by the revenue do not take into account any of the above mentioned observations either from the Hon'ble Finance Minister's speech or the provisions of CGST Act. Accordingly, the said decision cannot be a bounding decision for deciding the present issue. Further the said decision does not say that there is bar in cross utilization of the credit for the period after 30.04.2015, it holds that credit could have been cross utilized after issuance of Notification No 12/2015-CE (NT) 31 Excise Appeal No.71256 of 2018 dated 30.04.2015, stating that the notification is prospective. Therefore the said decision in any case does not support the case of revenue.
4.10 In view of the above, I do not find any merits in the impugned order and the same is set aside.
5.1 Appeal is allowed.
(Operative part of the order pronounced in open court) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp