CX - CENVAT Credit of Basic Excise Duty can be utilized for payment of EC & SHE Cess as they are 'duties of excise': CESTAT
By TIOL News Service
CHENNAI, AUG 16, 2018: THE issue in dispute in these appeals is whether CENVAT credit availed of Basic Excise Duty can be utilized for payment of education cess and secondary higher education cess.
Department issued Show cause notices and after due process of law, the original authority confirmed the demand with interest and imposed penalties.
Being aggrieved, assessee is now before the Tribunal.
It is submitted that education cess and secondary higher education cess being 'duties of excise', the utilization of CENVAT credit of the basic excise duty for payment of educational cess and secondary higher education Cess is thus within the legal framework of Rule 3(4) of CCR, 2004.
Furthermore, the issue in dispute is no longer res integra and is covered by the judgments of High Court of Gujarat in case of Madura Industries Textiles - 2012-TIOL-1094-HC-AHM-CX, by the High Court of Guwahati in cases of Kamakhya Cosmetics and Pharmaceuticals Pvt. Ltd., Dharampal Satyapal Ltd. and Prag Boismi Synthetics Ltd.
The CESTAT extracted the relevant provisions imposing EC & SHE Cess and observed that Rule 3(4) clearly lays down that the CENVAT Credit availed under Rule 3(1) by a manufacturer/service provider can be utilized for payment of any duty of excise on any final product.
Following the decisions relied upon by the appellant, the impugned order was set aside and the appeals were allowed.
(See 2018-TIOL-2521-CESTAT-MAD)
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