CESTAT allows cash refund of Education cess, Secondary, and Higher Education cess, and Krishi Kalyan cess
The appellant is engaged in providing dredging services and is registered with the department. They filed a refund claim under section 11B of the Central Excise Act, 1944 on the refund of unutilized CENVAT credit availed on Education cess, Secondary and Higher Education cess, and Krishi Kalyan cess. The refund claim was filed on the basis of Sutherland Global Services Pvt. Ltd. Vs. UOI in W.P. No. 4773/2018. They 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. Later, on department’s insistence, the decision was reversed the same. A refund was filed claiming refund of the Education cess, Secondary and Higher Education cess and Krishi Kalyan cess lying unutilized in their CENVAT account. After due process of law, the original authority rejected the refund claim holding that under section 140 of the CGST Act, 2017, refund can be sought only for eligible duties and that duties excludes refund of cess.
Aggrieved by the order, the appellant filed an appeal before Commissioner (Appeals) impugned herein upheld the same. Hence appeal before Tribunal.
The Tribunal in the case of Emami Cement Ltd. on an identical issue observed that “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.”
Relying on the case of Slovak India Trading Co. Pvt Ltd., the tribunal held that the assessee is eligible for the cash refund of the cessess lying as a cenvat credit balance.
Following the above decisions, the tribunal held that the rejection of the refund is not justified. The impugned order was set aside. The appeal was allowed with consequential reliefs.