2024-VIL-482-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 11B of Central Excise Act, 1944 – Sections 140 and 142(3) of CGST Act, 2017 – Cash refund of Cenvat credit of Cess in the form of Education Cess (EC) and Secondary Higher Education Cess (SHEC) – Rejection of refund claim – Appellant has filed refund claim of Cenvat credit availed on Education Cess and Higher Secondary Education Cess carried forward as on appointed day in terms of Section 142(3) of CGST Act – Vide Show Cause Notice, entire refund claim is proposed to be rejected in terms of provisions of Section 11B of the CEA, 1944 read with Section 142(3) of CGST Act – Original authority confirmed said proposal – Commissioner (Appeals) affirmed order passed by Original authority – Whether cash refund of Cenvat credit of Cess in form of Education Cess and Higher Secondary Education Cess is permissible to be refunded as assessee was unable to utilize said credit – HELD – Rule 3(vii) of CCR, 2004 specifically provided that CENVAT Credit in respect of Education Cess and Higher Secondary Education Cess shall be utilised only towards payment of Education Cess leviable on taxable services only and not against normal excise duty – Cross utilisation of CENVAT Credit in form of Education Cess and Secondary and Higher Education Cess against normal service tax and excise duty liability was not allowed – Cesses are excluded from definition of 'eligible duties and taxes' as per explanation 3 under Section 140 of CGST Act, thus, credit is ab initio not available for utilization for GST – In view of above, cesses are not be transitioned through TRAN-1, as per transitional provisions specified under CGST Act, credit balances not transitioned to GST regime shall lapse – Any claim of refund even under CGST has to be dealt with in terms of provisions of Section 11B(2) of the Act – There is no error when Commissioner (Appeals) has held that there is no provision in the Rules or in the Act to allow cash refund of cesses lying in balance in Cenvat credit – Once it is not allowable, question to refund same does not arises – Order under challenge is upheld and appeal is dismissed
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