TMI Blog2022 (3) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... eld, in view of the earlier decision of the Punjab and Haryana High Court in Rama Industries Ltd. vs. CCE, Chandigarh [ 2009 (2) TMI 136 - PUNJAB AND HARYANA HIGH COURT ] and the decision of the Karnataka High Court in Slovak India [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT ], that refund should be granted. It is, therefore, seen that there are conflicting decisions of the Karnataka High Court and the Punjab and Haryana High Court on the one hand and the Rajasthan High Court on the other hand. The decision of the Karnataka High Court in Slovak India was affirmed by the Supreme Court. It would, therefore, be appropriate to follow the view taken by the Karnataka High Court and the Punjab and Haryana High Court. It needs to be noted that CENVAT credit avail is a vested right as has held by the Supreme Court in Eicher Motors [ 1999 (1) TMI 34 - SUPREME COURT] ] and Samtel India [ 2003 (3) TMI 121 - SUPREME COURT ]. The appellant is, therefore, clearly entitled to the refund of the balance amount of credit of cess and the decision to the contrary taken by the Commissioner (Appeals) cannot be sustained - appeal allowed - decided in favor of appellant. - EXCISE APPEAL NO. 52318 OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refund claim is incomplete under the provisions of section 11B of Central Excise Act, 1944 as not accompanied by such documentary evidence to establish that amount of refund claimed was actually paid by them and not provided information in regard to period involved. (iii) The refund claim appears time barred under section 11B of the Central Excise Act, 1944 as it is filed for accumulated credit of Education Cess Secondary Higher Education Cess has been withdrawn w.e.f. 01.03.2015 vide Notification No. 14/2015-CE and 15/2015-CE both dated 0.03.2015. (iv) The refund claim appears inadmissible as these Cesses have been phased out vide above Notifications and no new liability to pay such Cesses arises, no vested right can be said to exist in relation to the accumulated credit of the past. (v) The claim for amount of CENVAT credit carried forward in the return relating to the period ending with day immediately preceding the appointed day are governed by Transitional Provisions under section 139 to 142 of Central Goods Service Tax Act, 2017. 4. The appellant filed a reply dated 17.08.2018 to the aforesaid show cause notice. The relevant portion of the reply is reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher education cess after these Cesses have been phased out. As these Cesses have been phased out and no new liablility to pay such Cess arises, no vested right can be said to exist in relation to the accumulated credit of the past . (v) In view of above clarification, I am of the opinion that as the claimant has not vested right on the accumulated cenvat credit of Education Cess and therefore they are not eligible for refund of the same. (vi) I also find that the refund claim is time barred under Section 11B of the Central Excise Act, 1944 as the Education Cess and Secondary Higher Education Cess has been withdrawn w.e.f. 01.03.2015. 6. Feeling aggrieved, the appellant filed an appeal before the Commissioner (Appeals). The said appeal was rejected by the Commissioner (Appeals) by order dated 12.06.2019 placing reliance upon the judgement of the Rajasthan High Court in Banswara Syntex Ltd. vs. Commr. C. EX. Service Tax, Udaipur [2019 (365) E.L.T. 773 (Raj.)]. The relevant portion of the order passed by the Commissioner (Appeals) is reproduced below: 9. The appellant has contended that the credits of Edu. Cess and Secondary Higher Edu. Cess were rightly legiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. vs. Commissioner of C. Ex., Bangalore [2006 (205) E.L.T. 956 (Tri.- Bang.)], against which the appeals filed by the department before the Karnataka High Court and the Supreme Court were dismissed. These decisions are reported in 2008 (10) S.T.R. 101 (Kar.) [ Union of India vs. Slovak India Trading Co. Pvt. Ltd. ] and 2008 (223) E.L.T. A170 (S.C.) [ Union of India vs. Slovak India Trading Co. Pvt. Ltd. ]; (ii) Reliance has also been placed upon the following decisions of the Tribunal: (a) M/s Bharat Heavy Electricals Ltd. (Excise Taxation Division) vs. The Commissioner, Central Goods Service Tax, Central Excise Customs, Bhopal [ 2020-VIL-402-CESTAT-DEL-CE ]; (b) Schlumberger Asia Services Ltd. vs. Commissioner of CE ST, Gurgaon-I [ Service Tax Appeal No. 60095 of 2021 decided on 24.05.2021 ]; (c) Nichiplast India Private Ltd. vs. Principal Commissioner CGST [ Excise Appeal No. 50790 of 2019 decided on 23.07.2021 ]; and (d) Kirloskar Toyota Textile Machinery Pvt. Ltd. vs. Commissioner of Central Tax, Bengaluru South GST Commissionerate [ 2021-VIL-375-CESTAT-BLR-CE ]; (iii) Reliance has also been placed upon the decision of the Punjab and Hariyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification dated 01.03.2015, levy of cess was exempted. The closing balance of credit of cess as on 28.02.2015, therefore, could not be utilized by the appellant and it was carried forward by him in the central excise returns. 11. The submission of learned counsel for the appellant is that refund of credit of cess cannot be denied merely on the ground that such credit which could not be utilised prior to GST regime would stand lapsed. In this connection, learned counsel placed reliance upon the decision of the Tribunal in Slovak India Trading. 12. The Tribunal, in the aforesaid decision rendered in Slovak India Trading held that refund has to be made when an assessee goes out of the Modvat Scheme or when the Company is closed. 13. The appeal filed by the Department before the Karnataka High Court to assail the aforesaid decision of the Tribunal was dismissed and the relevant portion of the judgment is reproduced below: 5. ******* The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee comi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very much utilizable under the existing provisions. The appellants could not carry over the same under the GST regime . Thus the appellants were in a position where they could not utilize the same. We agree with learned Counsel of the appellant that the credits earned were a vested right in terms of the Hon ble Apex Court judgement in Eicher Motors case and will not extinguish with the change of law unless there was a specific provision which would debar such refund . It is also not rebutted by the revenue that the appellants had earned these credits and could not utilize the same due to substantial physical or deemed exports where no Central Excise duty was payable and under the existing provisions, had the appellants chosen to do so they could have availed refunds/ rebates under the existing provisions. There is no provision in the newly enacted law that such credits would lapse. Thus merely by change of legislation suddenly the appellants could not be put in a position to lose this valuable right. Thus we find that the ratio of Apex courts judgment is applicable as decided in cases where the assessee could not utilize the credit due to closure of factory or shifting of facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited supra and after considering the decision of the Apex Court as well as the High Court of Karnataka in the case of Slovak India Trading Co. Pvt. Ltd. has held that the assessee is entitled to refund of an unutilized credit of Education Cess and Higher Education Cess after the introduction of GST. ****** 6.1. Further, I find that the Karnataka High Court in the case of Slovak India Trading Co. Pvt. Ltd. (cited supra) has held that when the assessee has moved out of Modvat Scheme/Cenvat Scheme, portion of unutilized credit should be allowed as refund. Since the issue is covered by the decision of the Slovak India Trading Co. Pvt. Ltd. (cited supra) and the same being the decision of a jurisdictional High Court would prevail over decision of other High Courts and the Tribunal as held in the case of CCE ST Vs. Andhra Sugars Ltd. cited supra and the Larger Bench decision of the Tribunal, Bangalore in the case of J.K. Tyre Industries Ltd. Vs. Asst. Commissioner of Central Excise wherein the Larger Bench has held that the Tribunal is bound by the decision of the jurisdictional High Court and is not bound by the decision of other High Courts. Further, I find that the two de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab and Haryana High Court examined whether refund could be ordered of unutilised credit on closure of the unit and held, in view of the earlier decision of the Punjab and Haryana High Court in Rama Industries Ltd. vs. CCE, Chandigarh [2009-TIOL-100-HC-P H-CX] and the decision of the Karnataka High Court in Slovak India, that refund should be granted. The observations of the Punjab and Haryana High Court are as follows: 8. We further find that this court in Rama Industries (Supra) relying upon judgment of Karnataka High Court in the case of Union of India Vs Slovak India Trading Co. Pvt. Ltd. 2006 (201) ELT 559 (Kar) has sanctioned refund of unutilised Cenvat Credit on the closure of factory. Rajasthan High Court in the case of Lav Kush Textiles Vs CCE, Jaipur 2017 (353) ELT 417 (Raj), Welcure Drugs Pharmaceuticals Ltd. Vs CCE 2018 (15) GSTL 257 (Raj) has formed similar view. High Courts have held that judicial discipline is required to be maintained; Tribunal cannot distinguish High Court judgments and is bound by High Court judgments. However, larger bench of Bombay High Court in the case of Gauri Plasticulture (Supra) has formed a different opinion. It is true that j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras HC] to assert that the accumulated credit of EC, SHEC KKC does not lapse on switchover to the GST regime and could be carried forward as credit under GST. 6. I have carefully considered the judgments relied upon by the both sides. The judgment of the Larger Bench of the Hon‟ble High Court of Bombay was precisely on the point as to whether the assessee can get cash refund of Cenvat credit which they were not able to utilize and it was answered in negative. The Hon‟ble High Court of Madras was examining a different issue as to whether the precision of the credit of EC, SHEC KKC into the new GST regime was permissible or otherwise. The Hon‟ble High Court of Madras has not dealt with the issue of cash refund of unutilized Cenvat credit which is the question in dispute. In view of the above, I find that there is no legal provision under which the assessee‟s appeal could be entertained. 22. The aforesaid decision of a learned Member is contrary to the Division Bench judgment of the Tribunal in Bharat Heavy Electricals and was also distinguished by the Tribunal in Kirloskar Toyota. 23. Learned authorised representative of the Department also place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ients Private Limited (supra) cited by Learned Counsel for the appellant - assessee has no bearing on the issue at hands, as the facts on record and question posed for consideration before us are entirely different from the facts and issues, which were involved in the case before Hon'ble the Supreme Court. The said judgment of Hon‟ble the Apex Court simply lays down that Education Cess as well as Secondary and Higher Secondary Education Cess are a part of Excise duty. This position of law perhaps cannot be disputed, even the authorities below have not denied claim of refund on such count; they have rather treated the Education Cess and Secondary and Higher Secondary Education Cess to be a duty under the Act of 1944, even while rejecting the assessee‟s claim. 27. In view of the discussion foregoing, we are of the considered opinion that the Tribunal has committed no error of law in holding that the appellant cannot claim cash refund or encashment of the unutilized and unavailed amount of Education Cess and Secondary and Higher Secondary Education Cess, lying in its credit. 24. It is, therefore, seen that there are conflicting decisions of the Karnataka High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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