TMI Blog2020 (10) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Act as they are read and applied mutatis mutandis, like Central Excise and Customs Duty Act. Even though the imposition and collection of Cess may be loosely termed as Tax or Duty, the collection of Cess remains distinct, inasmuch as Cess amount collected by the Government is liable to be spent for the avowed and dedicated purpose for which such imposition was made which is usually reflected in the name of the imposition itself like Education Cess, Secondary and Higher Education Cess etc. Mere facility of taking credit of Input Cess paid on Input goods or services just to avoid the cascading effect on the multiple transactions in the series does not militate or alter the character of the imposition of Cess itself. Like any other indirect taxes like Sales Tax, VAT, Excise Duty, etc., the removal of the cascading effect of Taxation in multiple transactions in series is provided by the Legislation to collect such taxes in a reasonable proportion to the value of the transactions, by removing the cascading effect by providing for Input Tax Credit (ITC) system. Section 140 of the CGST Act, 2017, with which we are concerned and which provides for transitional arrangement of Inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to GST Regime and they could be set off only against the Output Education Cess and Secondary and Higher Education Cess liability, once the levy itself ceased and dropped in 2015, the question of their carry forward and utilization becomes only academic. The learned Single Judge, with great respects, erred in allowing the claim of the Assessee under Section 140 of the CGST Act. The main pitfalls in the reasoning given by the learned Single Judge are (a) the character of levy in the form of Cess like Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess was distinct and stand alone levies and their input credit even under the Cenvat Rules which were applicable mutatis mutandis did not permit any such cross Input Tax Credit, much less conferred a vested right, especially after the levy of these Cesses itself was dropped; (b) Explanation 3 to Section 140 could not be applied in a restricted manner only to the specified Sub-sections of Section 140 of the Act mentioned in the Explanations 1 and 2 and as a tool of interpretation, Explanation 3 would apply to the entire Section 140 of the Act and since it excluded the Cess of any kind for the purpose of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of those parent enactments. 3. The fine distinction between Cess, Tax and Duty will also be discussed hereafter. But, by way of introductory remark, it can be stated here that while Cess is collected from the person on whom such liability is fixed to meet a particular kind of expenditure incurred by the Government and its collection and expenditure is dedicated to that particular object or purpose of imposition of Cess. While Tax is a General Revenue, which can be spent by the Government for general public purposes and Duty is imposed on manufacture in the form of Excise Duty or Customs Duty on Imports, under those specified laws, which also go to the General Revenue of the State. Fees is yet another impost which has the basis of quid pro quo at its back. 4. The controversy involved in the present case is about the set off, adjustment or utilisation of the Input Tax Credit of Cess paid at the time of manufacture or import by the Assessee, which provides Technical and Call Centre Services all over the country, namely as to whether such Cess in the form of Education Cess, etc. can be adjusted against the Output GST liability under the provisions of CGST Act, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act. Explanation . For the purposes of this sub-section, the expression unavailed CENVAT credit means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. (3) A registered person, who was not liable to be registered under the existing law , or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012- Service Tax, dated the 20th June, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the existing law, subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day: Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days: Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub-section. (6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take , in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely: (i) such inputs or go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that supply of services within a period of three months from the appointed day. (10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as may be prescribed. Explanation 1 .-For the purposes of 1[sub-sections (1), (3), (4)] and (6), the expression eligible duties means (i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ; (ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975 ; (iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 ; (iv) [....] (Omitted ibid) (v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) ; (vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985 ; and (vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001 (14 of 2001) in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Council, extend the period of ninety days by a further period not exceeding ninety days. Provided further that where the inputs have been received from an Export Oriented Unit or a unit located in Electronic Hardware Technology Park, the credit shall be allowed to the extent as provided in sub-rule (7) of rule 3 of the CENVAT Credit Rules, 2004. (2) Every declaration under sub-rule (1) shall- (a) in the case of a claim under sub-section (2) of section140, specify separately the following particulars in respect of every item of capital goods as on the appointed day- (i) the amount of tax or duty availed or utilized by way of input tax credit under each of the existing laws till the appointed day; and (ii) the amount of tax or duty yet to be availed or utilized by way of input tax credit under each of the existing laws till the appointed day; (b) in the case of a claim under sub-section (3) or clause (b) of sub-section (4) or sub-section (6) or sub-section (8) of section 140, specify separately the details of stock held on the appointed day; (c) in the case of a claim under sub-section (5) of section 140, furnish the following details, name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed person; (iii) The registered person availing of this scheme and having furnished the details of stock held by him in accordance with the provisions of clause (b) of sub-rule (2), submits a statement in FORM GST TRAN 2by 31st March 2018, or within such period as extended by the Commissioner, on the recommendations of the Council, for each of the six tax periods during which the scheme is in operation indicating therein, the details of supplies of such goods effected during the tax period; (iv) the amount of credit allowed shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal; and (v) the stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person. 9. The Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), New Delhi, issued a Circular No.87/06/2019-GST on 02nd January 2019 addressed to all Chief Commissioners and other Authorities clarifying the said provisions of CGST Amendment Act, 2018. The said Circular is also found to be relevant and therefore, it is quoted in extenso below. Circular No. 87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interchangeably with the word taxes and in the present context , the two words should not be read in a disharmonious manner. 3.2 Thus, expression eligible duties in section 140(1) which are allowed to be transitioned would cover within its fold the duties which are listed as eligible duties at sl. no. (i) to (vii) of explanation 1, and eligible duties and taxes at sl. no. (i) to (viii) of explanation 2 to section 140, since the expression eligible duties and taxes has not been used elsewhere in the Act. 3.3 The expression eligible duties under section 140(1) does not in any way refer to the condition regarding goods in stock as referred to in Explanation 1 to section 140 or to the condition regarding inputs and input services in transit, as referred to in Explanation 2 to section 140. 4. Further, it has been decided not to notify the clause (i) of sub-section (b) of section 28 and clause (i) of subsection (c) of section 28 of CGST (Amendment) Act, 2018 which link Explanation 1 and Explanation 2 of section 140 to section 140(1). This would ensure that the credit allowed to be transitioned under section 140(1) is not linked to credit of goods in stock, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Cess levied under section 81, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services shall be in addition to the tax chargeable on such taxable services , under Chapter V of the Finance Act, 1994 (32 of 1994). (3) The provisions of Chapter V of the Finance Act, 1994 (32 of 1994) and the rules made thereunder, including those relating to refunds and exemptions from tax and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under Chapter V of the Finance Act, 1994 or the rules, as the case may be. THE SECOND SCHEDULE [See section 88(1)] Provision of the CENVAT Credit Rules, 2002 to be amended Amendment Date of effect of amendment (1) (2) (3) Explanation to clause (b) of subrule (6) of rule 3. In the CENVAT Credit Rules, 2002, in rule 3, in sub-rule (6), in clause (b), for the Explanation , the following Explanation shall be substituted, namely:- Explanation . - For the removal of doubts, it is hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l equally apply to Krishi Kalyan Cess also for the purpose of Section 140 of the CGST Act. The relevant provisions of Central Excise Act and CENVAT Rules for availment and utilisation of CENVAT Credit 14. Section 37 of the Central Excise Act, 1944, provides the power of the Central Government to make Rules and various Clauses of the Section 37 empowered the Central Government to frame the Rules with regard to various aspects of the Central Excise Law and our attention was drawn towards Clause (xxviii) thereof, which provides for Rules to be framed in regard to the lapsing of credit of duty lying unutilised with the manufacturer of specificied 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. CENVAT Credit Rules 2004 15. Rule 3 of the CENVAT Credit Rules, 2004, provides that a manufacturer or a purchaser of final products or a provider of output service shall be allowed to take credit (hereinafter referred to as CENVAT Credit) of the specified duties in that Rule 3, which included Education Cess and Secondary and Higher Education Cess in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee during the contemporary period prior to 30th June 2017, cannot be allowed to be carried forward under the transitory provisions of Section 140 of the CGST Act, because it became a dead claim of the Assessee and since the levy of Cess was not continued after 2015 nor such levy was subsumed in the listed 16 taxes which were subsumed under the GST law, the credit in respect of such Cess could not be claimed against the Output GST liability. She emphasised that since Cess was collected for a specific and dedicated purpose by the Central Government and such levies imposed by the Finance Act, 2004 and 2007 respectively and the purpose of giving the input credit in respect of the same against the output Cess liability was only to remove the cascading effect and which is the bedrock of such Input Tax Credits in the indirect taxation system was not available, as Output Cess Liability ceased, therefore, the untilised portion of such CENVAT credit in the form of Education Cess and Secondary and Higher Education Cess became a dead claim after such levies were dropped in the year 2015 and unlike unutilised portion of CENVAT credit in the form of specified additional excise duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Education Cess on excisable goods and on taxable services could be utilised either for payment of Education Cess on excisable goods or for the payment of Education Cess on taxable services. e. The second proviso to Rule 3(7)(b) of the CENVAT Credit Rules provided that the credit of Secondary and Higher Education Cess on excisable goods and on taxable services can be utilised either for payment of Secondary and Higher Education Cess excisable goods or for the payment of Secondary and Higher Education Cess on taxable services. f. Similarly Rule 3(7)(d) provided that the CENVAT credit pertaining to Krishi Kalyan Cess on taxable services levied under Section 161 of the Finance Act 2016 shall be utilised only towards the payment of Krishi Kalyan Cess on taxable services. g. Thus from the inception of the Education Cess, Secondaryand Higher Education and Krishi Kalyan Cess the intention of the statute was to allow the credit utilisation of CENVATCredit pertaining to these cesses only as against the respective cesses levied on excisable goods or output taxable services. This position continued till 2015. h. Thus cross utilisation of the Education Cess and Secondary and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice. v. The 50% balance credit of Education Cess and Secondary and Higher Education Cess paid on capital goods received in the premises of the provider of output service in the financial year 2014-15 can be utilized for payment of service tax on any output service. vi. CENVATCredit of Education Cess and Secondary and Higher Education Cess paid on input service in respect of which the invoice, bill, challan or Service Tax Certificate for Transportation of Goods by Rail is received by the provider of output service on or after the 1st day of June, 2015 can be utilized for payment of service tax on any output service. m. The newly added provisos was a Special Purpose Vehicle for a limited period to give the benefit of cross utilisation as against excise duty and service tax only with regard to inputs and inputs services received on or after cut of date namely 01.03.2015 and 01.06.2015. n. Notifications 12 of 2015 and 22 of 2015 were challenged before the Hon ble Delhi High Court in the case of CellularOperators Association of India v UOI[Reported in 2018 (14) GSTL 522, (2018) 51 GSTR 338 (Del),MANU/DE/0710/2018]. o. Thus the Hon ble Delhi High Court upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint Commissioner of Income Tax, Company Range-III [ (2019)310C TR(Mad)746, [2019]414ITR196(Mad)]. c. It is submitted that as held by the Hon ble Apex Court, if the Statement of Objects and Reasons spells out the essential purpose which the enactment seeks to achieve or if the AmendingAct introducing the levy of cess spells out the specific purpose in which the levy has been introduced, then the subject levy has to be construed only as a fee and not a tax. d. Section 91 of the Finance Act, 2004 which introduced the levy of Education Cess specifically provides that the levy of Education Cess is provide funds for basic education. Similarly Section 136 of the Finance(Amending Act) 2007 specified the purpose viz to provide funds and infrastructure for medium and higher education. e. It is submitted that the other requirement that the fund is set apart and appropriated specifically for the performance of specified purpose and is not merged with benefit of the general public is also there in the present case. f. The contention of the respondent-assessee by placing reliance on the decision in Hingir Rampur Coal Company Ltd. v. State of Orissa MANU/SC/0037/1960 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f para 2.8 states that the proceeds of Secondary and Higher Education Cess will be credited into the Madhyamik Uchhatar Shiksha Kosh (MUSK) . Further sub para (c) of para 2.8 categorically states that the cess would be utilised in the ongoing schemes of Secondary and Higher Education. Sub para (e) of para 2.8 specifies that the Madhyamik Uchhatar Shiksha Kosh (MUSK) would be maintained as a reserve fund in the non interest bearing section of the Public Accounts of India. Para 2.9 mentions the actual fund allocations to be provided under the Madhyamik Uchhatar Shiksha Kosh (MUSK) . Similarly para 2.10 of the Standing Committee report gives elaborate details about the Prarambhik Shiksha Kosh (PSK) that was credited in the year 2006. It also states very specifically that the Prarambhik Shiksha Kosh (PSK) fund is maintained by the Ministry of Human Resource Development and that the transfer to the Prarambhik Shiksha Kosh (PSK) account are made by the Ministry of Finance after approval by the Parliament. Para 2.11 has also given the year wise chart on allocation and utilisation of education cess collected. It is further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of CENVAT Credit of the eligible duties. Thus the appellant submits, that the term eligible duty occurring in Section 140(1) of the CGST Act, 2017 cannot include the CENVAT Credit pertaining to Education Cess, Secondary and Higher Education Cess and Krishi KalyanCess as these are additional levy and had not been specifically provided in the Section. d. It is submitted therefore that the argument of the respondent herein that the extension of the applicability of Explanation 1 to Section 140(1) has not been brought into effect and hence the term eligible duties should be allowed to include cesses, is wholly untenable. e. Explanation (3) to Section 140 also makes it categorical that the intention of the Legislature was never to transitioned the CENVAT Credit pertaining to cesses. LEGAL PROPOSITION IV :- Cesses Cannot be Cross Utilised as against duties or taxes: a. The respondent-assessee herein has placed reliance on the decision of the Hon ble Supreme Court in Eicher Motors Ltd. v. UOI [ 1999 (106) ELT 3 (SC) . The contention of the respondent-assessee herein is that the CENVATCredit pertaining to Education Cess, Secondary and Higher Education Ces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of eligible duties and taxes envisages 9 different situations of which the situation postulated in sub section (1) and sub section (8) are almost similar in effect. The specific similarity in the two subsectionsare that in both the subsections the provisions speak about regular tax payers who have been in the CENVAT chain all along and who have excess credit in the last return of the erstwhile law preceding the date of inception of GST viz 01.07.2017. The difference between the two subsectionsis that while subsection (1) takes in its hold, manufacturers and service providers with single registration,subsection (8) deals with the centralised registration that was one of the norms in the service tax registration. First provision to subsection(8) of Section 140 further provides a leverage of 3 months to such assessee to transitioned the credit even postinception of GST. The other subsection deals with other specified circumstances, exempt goods or services in the earlier regime. b. However, the commonality in all the subsections except subsection (8) the phrase used is either CENVAT Credit of the eligible duties or CENVAT Credit of eligible duties and taxes .The term of elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007] wherein the Doctrine of Purposive Interpretation has been explained with reference to Bennion s Statutory Interpretation. According to Bennion s Statutory Interpretation relied by the Hon ble Supreme Court,three condition are necessary to employ the doctrine of purposive interpretation in place of literal interpretation :- 1. Whether the reading of the whole statuteor provision would determine precisely what the mischief was, the purpose of the act of was to remedy. 2. That the draftsman and Parliament had by inadvertent overlooked and omitted to deal with the eventuality that required to be dealt with, if the purpose of the Act is to be achieved. 3. It was possible to state with certainty what would be the additional word that would have been inserted by the draftsman and approved by the Parliament before the bill passed into law. h. Applying the doctrine of purposive interpretation to subsection(8) of section 140, the appellant submits that the three-condition laid down above are satisfied. 1. The purpose of section 140 was to transition only the subsumed duty and taxes which were in existence as on 01.07.2017 and it was never the intention to tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uties and tax did not affect Section 140(8) of the Act, as no such similar insertions were made in Section 140(8) of the Act and the said Subsection (8) of Section 140 independently covers the case of the present Assessee which entitled him to take such credit of the Education Cess and Secondary and Higher Education Cess, even after the introduction of GST Regime with effect from 01.07.2017. He submitted that such Cess was collected in the form of duty and taxes only and therefore, even though they were imposed by the Finance Act, the collection of levy was in the nature of duty or tax and the same was liable to be set off and utilised against the Output Tax Liability. 23. Though the learned counsel for the Assessee admitted that cross utilisation of Cess against the Output Tax Liability of Excise Duty and Service Tax prior to introduction of GST Regime on 01.07.2017 was not permitted as per Rule 7 of the CENVAT Rules, 2004 and Cess could be set off only against the Output Levy of Cess while the said imposition was operating, but, nonetheless, the CENVAT Credit in respect of such Cess, which was not so far utilised and such credit was carried forward in its Electronic Ledger wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 140(8) of CGST Act. A.1 The assessee had a Centralized registration under the Finance Act, 1994 and the impugned Cess credits were being carried forward in the periodic Returns and declared as unutilized credit in their Return (in Form ST-3 for service tax assessees) filed for the period ending June 2017. This is an undisputed fact. A.2 The factum of valid availment (act of taking credit does not denote utilization or adjustment) of the impugned Cess credit is undisputed. A.3 Hence, the eligibility to the impugned Cess credit till 30th June 2017 cannot be disputed. (Refer para A.11 below) A.4 The credit which is validly availed under the erstwhile laws (here, Cenvat Credit Rules, 2004) and lying unutilized as on 30 June 2017 can be transitioned into the GST regime only through Section 140 of the CGST Act. In other words, Section 140 of the CGST Act is the only provision which provides for the mechanism of transitioning credits eligible under the erstwhile laws into the GST regime. Each sub-Section of 140 deals with a specific scenario A.5 The said provision consists of several sub-sections, each of which is in relation to a specific independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1). 140(8) It provides for transition of CENVAT credit in respect of centralized registered person under the Finance Act, 1994. It is not covered under Section 140(1) according to the assessee. 140(9) It provides for taking recredit of CENVAT credit on input services in a situation where it is reversed for non-payment of consideration within three months. It is not covered under Section 140(1). A.6 It is submitted that there is no overlap in the situations contemplated in each sub-Section of Section 140. Thus, each sub-Section is independent, stand alone and self-contained dealing with separate scenarios, enabling seamless transition of credit. A.7 While Section 140(1) governs a situation of transition of credits lying unutilized in the last return filed under erstwhile laws, a very similar phraseology is also available in Section 140(8). The only difference between Section 140(1) and Section 140(8) is that sub-Section (8) deals specifically to a case of dealers having centralized registration while sub-Section (1) does not have such qualification. If both the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duties and taxes that can be taken as CENVAT credit. Education Cess and Secondary and Higher Education Cess are enumerated under clause (vi) and (via) respectively. Further, as per Rule 3(1a) of CCR, Krishi Kalyan Cess can also be taken as CENVAT credit. Hence, all the three Cesses qualify to be CENVAT credit as per Rule 3(1) of CCR. A.12 Thus on a plain construction of Section 140(8), credit of Cesses is eligible to be transitioned. The submission of the Appellant Department that the words eligible duties should be read into Section 140(8) would amount to causing violence to the provision and hence impermissible. A.13 When the Legislature introduced the words eligible duties by way of a retrospective amendment in Section 140(1) vide Central Goods and Services Tax (Amendment) Act, 2018 ( Amendment Act ), it has deliberately chosen not to amend sub-Section (8). Hence, a purpose and intent behind the non-amendment should be imputed and thereby the wisdom of the Legislature should be respected. Therefore, the said expression eligible duties ought not to be read into the provision. Reliance is placed on decision of P.M. AshwathanarayanaSetty v. State of Karnataka, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitional credit is valid under Section 140(1). B.1 Section 140(1) of the CGST Act states that a person registered both under the existing law and GST, shall be allowed to take, in his electronic credit ledger, credit of the amount of CENVAT Credit of eligible duties carried forward in the returns, furnished under the existing law by him (ST-3 Returns) in respect of the period ending with the day immediately preceding the appointed day (April-June 2017) in such manner as may be prescribed. It is an admitted position that the provisos to Section 140(1) are not attracted in the present case. B.2 The submissions in paragraph A10 A11 above on the meaning of CENVAT credit and how the Cesses are covered under the same in the context of Section 140(8) is applicable to Section 140(1) as well. B.3 The assessee submits that the true meaning of the term eligible duties in Section 140(1) needs to be then examined. B.4 The term eligible duties is defined in Explanation 1 to Section 140 as being applicable to transition of credit under Section 140(6). It is for this reason that it states that the same would mean the duties enumerated therein, paid on inputs held in st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHE Cess on excisable goods under Finance Act 2004 and Finance Act, 2007 levy it as duties of excise. The Impugned Cesses are levied as tax and not as fee. B.9 It is further submitted that all the impugned Cesses are levied as duties and taxes and not as a fee. While the assessee elaborates the same infra, it is not the case of the assessee that these Cesses are basic excise duty levied under Central Excise Act. In other words, this is a cess levied as a duty and it is in the character of duties of excise but it is not excise duty per se. B.10 Further, Edu Cess and SHE Cess on taxable services and KKC are also covered under the term eligible duties in Section 140(1) as the term duties encompasses taxes within its ambit as well. Article 366(28) of the Constitution defines taxation to include includes the imposition of any tax or impost, whether general or local or special and that the term tax shall be construed accordingly. Department s Circular in No. 87/06/2019-GST dated 02.01.2019 states that the term duties and taxes are used interchangeably [paragraph 3.1.(iii) at page 30 of the paperbook dated 23rd January 2020]. Hence, Edu Cess and SHE Cess on taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the expression eligible duties and taxes is not employed either in Section 140(1) and Section 140(8) and Explanation 3 being only in the nature of explaining the scope of the said expression, the said Explanation 3 becomes irrelevant in understanding the scope and coverage of Section 140(1) and Section 140(8). Hence, the same is not applicable to the present case even though it has been notified. C. Cesses are in the nature of duty and not fee. C.1 In the case of Hingir-Rampur Coal Ltd. v. State of Orissa AIR 1961 SC 459 , Constitution Bench of Hon ble Supreme Court affirmed the basic tests, laid down in previous cases, for determining the character of a cess levy whether it is in the nature of a tax or fee. It held that a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, whereas a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. It further held that tax recovered by public authority invariably goes into the Consolidated Fund which ultimately is utilised for al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the Consolidated Fund of India without an appropriation made under law in accordance with Article 114. C.7 The CAG Reports relied upon by the assessee clearly establish that the Cesses are collected into the Consolidated Fund of India and not credited into any specific fund set up for this purpose. [pages 78, 78A, 81 para 2.3.3, 84, 89 of paperbook dated 30th September 2020]. In fact no Fund has ever been created for the purpose and a portion of the collections has been only transferred to a Major head of account as part of Reserve Funds in Public Accounts. The money has not been spent either for the stated purposes. C.8 In the CAG Report for FY 2014-15, it has been stated that A non-lapsable fund for elementary education known as Prarambhik Shiksha Kosh (PSK) was created in 2005-06 under non-interest bearing section of the reserve funds in the Public Account. Further, it states that Edu Cess is initially credited into Consolidated Fund of India and that there is no correlation between the collection of Edu Cess and amount transferred into such PSK fund created. In respect of SHE Cess it states that there is neither a fund was designated to deposit the proceeds of SHE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHE Cess and KKC are in the nature of tax/duty only and not in the nature of fee. D. CENVAT Credit validly availed is a vested and indefeasible right. D.1 It is submitted that the Impugned cesses were imposed under various Finance Acts and their levy were subsequently abolished. It is an undisputed fact that CENVAT Credit of these Cesses are availed through the provisions of CCR. CCR has been enacted using the powers conferred under Section 37 of the Excise Act. It is further submitted that Section 38A(c) of the Excise Act specifically saves any right accrued under any Rule amended, repealed, superseded or rescinded. Hence, while the levy was abolished, the CENVAT Credit availed under Rule 3 of CCR is specifically saved under Section 38A of the Excise Act. D.2 Assessee submits that CENVAT Credit of Cesses validly availed by the assessee is a vested and indefeasible right and cannot be taken away without the authority of law. Reliance in this regard is placed on Eicher Motors Ltd. v. UOI 1999 (106) ELT 3 (SC) and CCE v. Dai IchiKarkaria Ltd. 1999 (112) ELT 353 (SC) . D.3 Further reliance is placed on the following cases wherein it has been held that cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Impugned Cesses. D.8 In light of the above, it is submitted that CENVAT Credit of Impugned Cesses lying unutilized as on 30.06.2017 cannot be denied as already lapsed. E. The concept of availment and utilization of CENVAT credit are distinct and cannot be mixed or used interchangeably. E.1 It is submitted that bar on utilization of CENVAT credit of Education Cess and Secondary and Higher Education Cess until 30.06.2017 does not ipso facto vitiate the validity of availment of such CENVAT credit. It is submitted that the concept of availment and utilization are distinct and cannot be used interchangeably. This can be seen evidently seen from reading of the expression contained in Rule 3(1) [taking credit] as against Rule 3(4) [utilization of credit] when read along with Rule 14. E.2 Further reliance is placed on decision of Hon ble Supreme Court decision in Union of India v. Ind-Swift Laboratories Ltd. 2011 (265) ELT 3 (S.C.) . The issue before the court was whether interest liability under Rule 14 of CCR would kick in from the date of taking CENVAT credit or from the date of utilization of such CENVAT credit taken. The relevant phrase in Rule 14 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Secondary and Higher Education Cess availed validly and lying in the books could not be utilized for payment of any output tax liability. E.7 This inability to utilize the CENVAT credit of Edu Cess and SHE Cess after 01.06.2015 was challenged before Hon ble Delhi High Court in Cellular Operators Association v. Union of India (2018) 14 GSTL 522 (Del.). In other words, the case before the Hon ble High Court was with regard to whether Edu Cess and SHE Cess lying un-utilised as CENVAT credit as on the date of their abolishment can be utilised for payment of Basic Excise Duty, Service Tax, etc. This judgment nowhere discussed the validity of the CENVAT Credit of Edu Cess and SHE Cess availed and lying unutilized in the books. In other words, it is on utilization of credit as per then existing provisions of law and not on availment. Further, even such restriction on utilization was upheld only on account of express statutory bar to that effect in Rule 3(7)(b) and not on account of nature of those Cesses (being in the nature of tax or fee) or any such reasons. E.8 Hence, it is submitted that the ratio of the said decision is not relevant to the facts of the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions, by removing the cascading effect by providing for Input Tax Credit (ITC) system. 29. Section 140 of the CGST Act, 2017, with which we are concerned and which provides for transitional arrangement of Input Tax Credit, though comprises of 10 Sub-sections and the Explanations 1, 2 and 3 after such 10 Sub-sections, are commonly applicable tools of interpretation. The Explanation 1 refers to Sub-sections (1), (3), (4) and (6), because these four Sub-sections use and employ the term Eligible Duties and Explanation 1 confines Eligible Duties to 7 specified duties under that Explanation 1, namely Additional Excise Duty under Additional Duties of Excise (Goods of Special Importance) Act, 1957, Additional Duty under Custom and Tariff Act, 1975, Additional Custom Duty on Taxable Articles, Duty of Excise in the First Schedule to the Central Excise Tariff Act, 1985 and National Calamity Contingency Duty under Section 136 of the Finance Act, 2001, etc. 30. Therefore, only the seven specified duties as Eligible Duties in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the appointed date i.e. 01.07.2017 will be eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appointed day of 01.07.2017 for which a time period of 30 days is prescribed and the said period can still be extended by another 30 days for reasons to be recorded by the Commissioner. Therefore, the Legislature has very carefully specified the duties and taxes in respect of stocks held for which requisite declaration in Form TRAN-1 is submitted as on 30th June 2017 and also the service tax in respect of services which are input services received before 30th June 2017 of which invoices may not have been received before that date and therefore, a relaxation of 30 days is provided for them. Therefore, the Court by any intendment or implication cannot include the aforesaid three types of Cesses, with which we are concerned, in the terms of Eligible Duties and Taxes or Eligible Duties with reference to Explanation 1 and Explanation 2 to be carried forward and transitioned under Section 140 of the Act. 35. The Legislature took further care by inserting Explanation 3 which is couched in negative terms and for removal of any doubt, it further clarified that such eligible duties and taxes will exclude an Cess which has not been specified in Explanations 1 and 2. We may point out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under CGST Act. 38. Merely because the Assessee in the present case before us is a person having centralized registration has taken in his Electronic Credit Ledger the amount of such Education Cess and Secondary and Higher Education Cess, it does not entitle him to utilize the said unutilised amount of Education Cess and Secondary and Higher Education Cess against the Output GST Liability. The taking of the input credit in respect of Education Cess and Secondary and Higher Education Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped, does not even permit it to be called an input CENVAT Credit and therefore, mere such accounting entry will not give any vested right to the Assessee to claim such transition and set off against such Output GST Liability. The emphasis on the words taken or availed in contrast with the words utilised , adjusted or set off laid by the learned counsel for the Assessee is, with respects, misplaced. These words do not lie in independent watertight silos or compartments. They are rather synonymous in the context of controversy we are dealing with. Finally, what is important is whether the Assessee get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. If one carefully compares all Sub-sections of Section 140, one can discern that while all other Sub-sections talk of entitled to take credit , Sub-section (8) uses the word allowed to take . The utilisation of such credit, even if taken in Electronic Ledger and notified in Form TRAN-1, does not guarantee any such right of utilisation independent of other parts of Section 140 specially ignoring Explanation 3. Subsection (8), therefore, cannot be said to be an independent Code of law for the dealers holding centralised registration, as canvassed. 41. The contention of the learned counsel for the Assessee that the Assessee was having a centralized registration and Input Education Cess and Secondary and Higher Education Cess being CENVAT under Cenvat Rules, 2004, deserve to be carried forward and allowed as set off against GST Liability, merely because it had carried forward the same in the Centralised Electronic Credit Ledger, has no substance. Merely because the revenue authorities, after the cessation of levy of Education Cess and Secondary and Higher Education Cess in the year 2015 did not take any action in the contemporary period, until the impugned communication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption from payment of basic duty of excise for goods specified in the Notification dated 09.09.2003 and cleared by its units located in the State of Sikkim had no reference to the exemption to other duties like National Calamity Contingent Duty (NCCD), Education Cess and Secondary and Higher Education Cess and therefore, the said Notification dated 09.09.2003 could not by implication be extended to exempt even the levy of these Cesses in the form of National Calamity Contingent Duty, Education Cess and Secondary and Higher Education Cess. The relevant extract from the said judgment from the Head Note of SCC is quoted below for ready reference. It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of duty contained in Rule 2(v) which according to the well-recognised canons of constructiion would be projected in Rule 8(1), be read as granting exemption only in respect of duty of excise payable under the Central Excise Act, 1944. Undoubtedly, by reason of Section 32(4) of the Finance Act, 1979 and simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cess, secondary and higher education cess. A notification has to be issued for providing exemption under the said source of power. In the absence of a notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted. ..... 1. (2019) 19 SCC 801 : 2019 SCC OnLine SC 421, Bajaj Auto Ltd. v. Union of India ( held, per incuriam ) ..... 3. (2018) 1 SCC 105, SRD Nutrients (P) Ltd. v. CCE ( held, per incuriam ) 45. Much reliance was placed by the learned counsel for the Assessee on the judgment of the Hon ble Supreme Court in the case of Eicher Motors v. Union of India [(1999) 106 ELT 3 (SC)] , in which dealing with the case of earlier system of Modvat before Cenvat Rules came into force and Rule 57F(4A) of the Central Excise Rules, 1944 was questioned before the Hon'ble Supreme Court and the Supreme Court struck down Rule 57F(4A) of the Central Excise Rules as being beyond the Rule making powers conferred on the Central Government under Section 37 of the Central Excise Act, 1944, on the ground that a right (of Modvat) accrued to the Assessee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is therefore distinguishable. Moreover, in paragraph 6 of the judgment quoted above, one should mark the words of the Hon ble Supreme Court that the right accrued would be continued until the facility available thereto gets worked out . Obviously, the adjustment of CENVAT or unutilised Education Cess or Secondary and Higher Education Cess cannot work out because no Output Education Cess and Secondary and Higher Education Cess Liability existed even prior to 01.07.2017, once the levy was dropped by the Finance Act, 2015. So, there was no way to work out the credit of Education Cess and Secondary and Higher Education Cess even against the Excise Duty on finished goods prior to 01.07.2017 much less against GST Output Liability after 01.07.2017. 48. Another case law which was relied upon by the learned counsel for the Assessee was with regard to words credit taken or availed as distinguished from the words utilized for that purpose . The learned counsel relied upon the decision of the Hon ble Supreme Court in the case of Union of India v. Ind-Swift Laboratories Ltd. [(2012) 25 STR 184 (SC)] . However, we do not find any need to discuss the said judgment in detail bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In bringing out the essential features of a tax this definition also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference . Both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become, a part of the consolidated fund . It is earmarked and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment; and the argument was that the contribution thus exacted was not a fee but a tax and as such outside the competence of the State Legislature. In dealing with this argument Mukherjee, J., as he then was, cited the definition of tax given by Latham, C.J., in the case of Matthews and has elaborately considered the distinction between a tax and a fee. The learned judge examined the scheme of the Act and observed that the material fact which negatives the theory of fees in the present case is that the money raised by the levy of the contribution is not earmarked or specified for defraying the expense that the Government has to incur in performing the services. All the collections go to the consolidated fund of the State and all the expenses have to be met not out of those collections but out of the general revenues by a proper method of appropriation as is done in the case of other Government expenses . The learned judge no doubt added that the said circumstance was not conclusive and pointed out that in fact there was a total absence of any co-relation between the expenses incurred by the Government and the amount raised by contribution. That is why Section 76(1) was struck do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x was not accepted by the Court. Venkatarama Aiyar, J., took the view that the funds raised from the merchants for a construction of a market in substance amounted to an exaction of a tax. Whether or not the construction of a market amounted to a service to the notified area it is unnecessary for us to consider. Besides, as we have already pointed out we have now three decisions of this Court which have authoritatively dealt with this matter, and it is in the light of the said decisions that the present question has to be considered. 51. Such distinctions were also studied and highlighted by a Division Bench judgment of this Court to which one of us (Vineet Kothari,J) was a party in the case of Tamil Nadu Minerals Ltd. v. Joint Commissioner of Income Tax [TCA No.1806 of 2008 dt. 22.04.2019 , where the question involved was whether the 'nomination charges' paid by the Government Company M/s. Tamil Nadu Minerals Limited to State under Section 8C(7) of the Minor Mineral Concession Rules was only a Royalty and not Tax, Duty, Cess or Fees and therefore, the delayed payment thereof did not attract Section 43B of the Income Tax Act, 1961, so as to disallow the same as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and. It means a tax and is generally used when the levy is for some special administrative expense which the name (health cess, education cess, road cess etc.) indicates, Shinde Bros. v. Commr., AIR 1967 SC 1512: (1967) 1 SCR 548. 21.5.Means the goods and services tax compensation cess levied under Section 8 of Goods and Services Tax (Compensation to States) Act, 2017, [Section 2(1)(c), Goods and Services Tax (Compensation to States) Act, 2017 (India)]. 22. TAX 22.1. A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered . This definition brings out the essential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to say, it is imposed under statutory power without the tax payers consent and the payment is enforced by law. The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom one person, in the expectation and intention that he shall indemnify himself at the expense of another, such as the excise or customs. [Wharton's Law Lexicon.] 23. Tax and Fee 23.1.The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity, although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest, (vide Findlay Shirras on Science of Public Finance, Vol. I). Commr., Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282: 1954 SCR 1005: 20 Cut LT 250. 23.2. A fee is generally defined to be a charge for a special service rendered to individuals by some governmental agency, State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal, (2004) 5 SCC 155. 23.3.Taxation includes every charge or burden imposed by the sovereign power upon persons, property or property right, for the use and support of the Government and to enable it to discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) qualified or base fee; (3) fee-tail, formerly fee conditional.[Wharton's Law Lexicon.] 25.3. Fees are a sort of return or consideration for services rendered, which makes it necessary that there should be an element of quid pro quo in the imposition of a fee. There has to be a co-relationship between the fee levied by an authority and the services rendered by it to the person who is required to pay the fee, Govt. of A.P. v. Hindustan Machine Tools Ltd., (1975) 2 SCC 274. 25.4. Perquisites allowed to officers in the administration of justice, as a recompense for their labour and trouble, ascertained either by Acts of Parliament, by rule or order of Court or by ancient usage.[Wharton's Law Lexicon.] 25.5.Means the charges specified by the food authority for clearance of imported food consignments, [Regulation 2(j), Food Safety and Standards (Import) Regulations, 2017 (India)]. 26. Levy and Fee 26.1.A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual services rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns or trade or business in any local area and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be and does not become, a part of the consolidated fund. It is earmarked and set apart for the purpose of services for which it is levied. There is, however, an element of compulsion in the imposition of both tax and fee, Hingir Rampur Coal Co. Ltd. v. State of Orissa, AIR 1961 SC 459, 464: (1961) 2 SCR 537. 27.2.Conceptually fee and tax stand on different footings; whereas the element of tax is based on the principle of compulsory exaction, the concept of fee relates to the principle of quid pro quo. The validity of tax cannot, therefore, be upheld on the ground that the same would be a fee, State of W.B. v. Kesoram Industries Ltd., (2004) 10 SCC 201. 28. LEVY 28.1.Means to realise or to collect. Only necessary con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s indicating the subject matter of the tax and the rates at which it has to be taxed. The term assessment , on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount, Asstt. Collector of Central Excise, CCE v. National Tobacco Co. of India Ltd., (1972) 2 SCC 560: AIR 1972 SC 2563: (1973) 1 SCR 822: 1973 Tax LR 1607. 32. DUTY 32.1.Means a duty of customs leviable under the Act, [Section 2(15), Customs Act, 1962 (India)]. 32.2.A tax, an impost or imposition; also an obligation. [Wharton's Law Lexicon.] 32.3.Duty, direct taxes and indirect taxes - The word duty means an indirect tax imposed on the importation or consumption of goods. Customs are duties charged upon commodities on their being imported into or exported from a country. The expression direct taxes includes those assessed upon the property, person, business, income, etc., of those who are to pay them, while indirect taxes are levied upon commodities before they reach the consumer and are paid by thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale price) rather than a payment consisting of a lump sum in consideration of acquisition of rights. It may also be applied to payment to performers. In the context of the Act, royalty is a genus and compensation is a species. Where a licence has to be granted, it has to be for a period. A compensation may be paid by way of annuity. A compensation may be payable on a periodical basis, as apart from compensation, other terms and conditions can also be imposed. The compensation must be directed to be paid with certain other terms and conditions which may be imposed, Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd., (2008) 13 SCC 30. 52. The learned counsel for the Revenue relied upon the decision of the Hon ble Supreme Court in the case of Union of India v. Uttam Steel Limited [(2015 (13) SCC 209] on the issue of the claim of the Assessee having become dead claim prior to the introduction of GST Regime on 01.07.2017 and similarly, the Hon ble Supreme Court in the aforesaid case held that the claim had already became dead, the extended period of limitation by way of amendment to Section 11B of the Act would not revive such a claim. Hon ble Mr.Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred. 53. The same Bench of Hon ble Supreme Court in a later case of Jayam and Co. v. Assistant Commissioner and Others [(2016) 15 SCC 125] in a case under Tamil Nadu Value Added Tax Act, 2006, held that it is trite law that whenever concession is given by a statute or notification etc., the conditions thereof are to be strictly complied with in order to avail such concession. Thus, it is not the right of the dealers to get benefit of input tax credit, but it is a concession granted by virtue of Section 19 and therefore, the conditions for availing such Input Tax Credit have to be fulfilled. Paragraphs 11 to 13 of the said judgment authored by the Hon ble Mr.Justice A.K.Sikri, are quoted below for ready reference. 11. From Sub-section (10) onwards, provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the VAT Act, read along with other provisions of the said Act as referred to above. 13. For the same reasons given above, challenge to constitutional validity of Sub-section (20) of Section 19 of VAT Act has to fail. When a concession is given by a statute, the Legislature has power to make the provision stating the form and manner in which such concession is to be allowed. Sub-section (20) seeks to achieve that. There was no right, inherent or otherwise, vested with dealers to claim the benefit of ITC but for Section 19 of the VAT Act . That apart, we find that there were valid and cogent reasons for inserting Section 19(20). Main purport was to protect the Revenue against clandestine transactions resulting in evasion of tax. ... 54. We are supported in our aforesaid view by the aforesaid two judgments also largely because it is clear that CENVAT credit or Input Tax Credit under the GST Regime is a concession and a facility and not a vested right. Even if one were to rank such a right of CENVAT credit on the pedestal of a statutory right, even that right can be curtailed and regulated by conditions for availing such right. It is clear from the Scheme of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise [(2002) 142 ELT 5 (SC)] . 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 57-F(4-A), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sus Commissioner of Central Excise, Indore, 2002 (142) ELT 5 (SC), wherein proviso to Rule 57 introducing six months time limit for claiming MODVAT credit benefit was challenged. Arguments predicated on vested right being annulled and reduced to nothing were rejected, recording as under - 7. Having heard the arguments of the parties and after considering the Rule in question, we think that by introducing the limitation in the said proviso to the Rule, the statute has not taken away any of the vested rights which had accrued to the manufacturers under the Scheme of MODVAT. That vested right continues to be in existence and what is restricted is the time within which the manufacturer has to enforce that right. The appellants, however, contended that imposition of a limitation is as good as taking away the vested right. In support of their argument, they have placed reliance on a judgment of this Court in Eicher Motors Ltd. v. Union of India (1999) 2 SCC 361 wherein this Court had held that a right accrued to an assessee on the date when it paid the tax on the raw materials or the inputs would continue until the facility available thereto gets worked out or until those goods exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted right. In support of their argument, they have placed reliance on a judgment of this Court in Eicher Motors Ltd. v. Union of India [1999 (106) ELT 3 SC) wherein this Court had held that a right accrued to an assessee on the date when it paid the tax on the raw-materials or the inputs would continue until the facility available thereto gets worked out or until those goods existed. In that background, this Court held that by Section 37 of the Act, the authorities concerned cannot make a Rule which could take away the said right on goods manufactured prior to the date specified in the concerned Rule. In the facts of Eicher's case (supra), it is seen that by introduction of Rule 57F(4A) to the Rules, a credit which was lying unutilized on 16.3.1995 with the manufacturer was held to have lapsed. Therefore, that was a case wherein by introduction of the Rule a credit which was in the account of the manufacturer was held not to be available on the coming into force of that Rule, by that the right to credit itself was taken away, whereas in the instant case by the introduction of the second proviso to Rule 57G, the credit in the account of a manufacturer was not taken away but o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and States to impose GST on the sales of goods and services like Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017, the Union Territory Goods and Services Tax Act, 2017, the Goods and Services (Compensation to States) Act, 2017, etc. by Parliament and respective State Goods and Services Tax Act by different States and Union Territories. (1) Central Excise Duty (2) Additional Excise Duties (3) Excise Duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (4) Service Tax (5) Additional Customs Duty commonly known as Countervailing Duty (6) Special Additional Duty of Customs (7) Central Surcharges and Cess, so far as they relate to the supply of goods and services. (8) State Value Added Tax/Sales Tax (9) Entertainment Tax (other than the tax levied by the local bodies) (10) Central Sales Tax (levied by the Centre and collected by the States) (11) Octroi and Entry Tax (12) Purchase Tax (13) Luxury Tax (14) Taxes on lottery (15) Betting and gambling (16) State cess and surcharges insofar as they relate to supply of goods and services. 59. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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