2019 (2) TMI 380 – CESTAT MUMBAI – TMI – CENVAT Credit – Education Cess & Secondary and Higher Secondary Education Cess – purchase of inputs for manufacture from 100% EOU for manufacturing – Extended period of limitation – Held that:- There is no doubt that Education Cess & Secondary and Higher Secondary Education Cess paid against additional duty leviable under section 3 of Customs Tariff Act are covered under cenvat credit permitted to be taken under Rule 3(1) of Cenvat Credit Rules 2004. Further, in respect of additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act, nothing has been mentioned in Rule 3(1) of Cenvat Credit Rules 2004 that Education Cess & Secondary and Higher Secondary Education Cess paid on those duty is also included for availment of credits by the manufacturer.
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Thus, only education cess paid under sub-section (5) is outside the purview of Cenvat Credit Rules and Secondary & Higher Education cess and are not attached to addition
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his appeal. 2. The brief facts of the case is that appellant manufactures bright bar of stainless steel, and mild steel and mild steel wire. It has registered under the Central Excise Act. It availed cenvat credit on inputs for such manufacturing. During investigation made in January 2013, after intelligence gathered by the excise department, appellant was informed that as per provision of Rule 3(1) of Cenvat Credit Rules 2004 credit on Education Cess & Secondary and Higher Secondary Education Cess were not admissible and the appellant should reverse the same. Appellant did the reversal promptly and debited cenvat credit account for ₹ 15,31,045/- on 23.01.2013 but it was put to show-cause for such availment of allegedly inadmissible credit. The matter was adjudicated upon that resulted in the confirmation of demand under Rule 14 of the Cenvat Credit Rules to the tune of ₹ 15,31,045/- along with applicable interest at the appropriate rate and penalty of equivalent amount
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March 2011 and reversed the same immediately after it was brought to its knowledge by the excise official and such credit was only taken in its account but never utilised. In citing Larger Bench decision of this Tribunal in the case of JK Tyres & Inds. reported in 2016 (340) ELT 193 (Tri-LB) he also pointed out that the issue had attained finality that merely by availing credit which was reversed before utilisation against remittance of duty, interest liability would not arise. He further argued with reference to several judicial pronouncement reported in 2012 (281) ELT 192 (Kar.), 2012 (28) STR 214 (Kar.), 2014 (310) ELT 509 (Mad.) and in the case of Commissioner of Central Excise, Madurai vs. Strategic Engineering 2014 (310) ELT 509 (Mad) that the position of law has become quite clear that mere taking of cenvat credit itself would not compel the assessee to pay interest as well as penalty and consequently the respondent s stand for recovery of interest and imposition of penalty
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e inadmissibility credit for which interference in the order of the Commissioner (Appeals) is uncalled for. 5. Heard from both sides at length, perused the case records, relied upon decisions, relevant provision of law and also written submissions of the appellant. Going by the show- cause notice and the adjudication order, it is very much clear that customs duty, as per customs tariff act were paid by the appellant in accordance to Section 3 of Central Excise Act 1994 as input material were brought by the appellant from 100% EOU to its manufacturing unit located in India and Education Cess & Secondary and Higher Secondary Education Cess were duly paid by it. However, as rule 3(1) of the Cenvat Credit Rules 2004 has not attached availment of such cenvat credit against additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act and Section 3 of the Customs Tariff Act does not specifically say about availment of cenvat credit against the cess paid on Educati
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edit Rules 2004 that Education Cess & Secondary and Higher Secondary Education Cess paid on those duty is also included for availment of credits by the manufacturer. 6. Going by Section 126 and 129 of the Finance Act it is very much clear that Secondary and Higher Secondary Education Cess levied under section 126 is not to be levied on the additional duty referred in sub-section (5) of Section 3 of the Customs Tariff Act. Therefore the sample copy of invoice, which is imprinted on the show-cause notice, though reveals payment of additional duty of excise under sub-Rule (5) of Rule 3 was paid by the appellant under erroneous interpretation of law and the same though taken as a credit should have been refunded back again under proper application. More importantly the other customs duty paid as additional duty of excise (CVD) under section 3 of the Customs Tariff Act is included in the provision containing availment of cenvat credit in Rule (1) (vii) of Cenvat Credit Rules 2004 to be
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