Order Date:  02 November 2022

Facts:

• The appellant, M/s. Emami Paper Mills Limited is engaged in the manufacture and sale of writing paper and printing paper, newsprint, etc. falling under Chapter 48 of the First Schedule to the Central Excise Tariff Act, 1985.
• On 20.12.2013 an audit memo was issued, pursuant to an audit conducted by the Department for the period 2011-12 and 2012-13. The said audit memo alleged that the appellant had wrongly utilized Cenvat Credit of Central Excise duty of Rs. 9,08,676/- towards payment of E Cess and SHE Cess, thereby leading to the contravention of Rules 
• Show cause notice dated 19.02.2015 was issued, proposing recovery of Cenvat Credit of Rs. 9,08,676/- under Rule 14 of the Rules read with the proviso to Section 11A(1) of the Act, for illegal utilization of basic Excise Duty credit towards payment of E Cess and SHE Cess.

Issue:

• Whether the basic Central Excise duty credit can be utilized for payment of E Cess and SHE Cess.

Order:

• The Cestat observed that the Appellant could not have been faulted for its conduct, even if it were to be held that cross utilization of basic Excise Duty credit for payment of E Cess and SHE Cess was prohibited under the Rules. In the case of M/s Madura Industrial Textiles, the Hon’ble Gujarat High Court had considered the issue and ruled in favour of the assessee.
• It is held that the purported disallowance of Cenvat Credit of Rs. 9,08,676/- against the appellant is illegal and unjustified.