Date of order: 19.10.2022

Facts:

• The appellant namely, M/s Mahavir Transmission Ltd, is a manufacturer of AC Conductors, which are used in transmission of electricity. As on 28.02.2015, the appellant had a credit balance in the Cenvat Register of Education Cess and Secondary & Higher Education Cess of Rs.3,27,325/-.
• Under the provisions of Cenvat Credit Rules, Rule 3(7)(b), the appellant/assessee was entitled to use the credit in respect of Education Cess and Secondary & Higher Education Cess for payment of Education Cess on duty or taxable services and similarly, credit of Secondary and Higher Education Cess could used for payment of such similar cess on excise duty on output service tax. With effect from 01.03.2015, under the Finance Bill/Act, 2015, levy EC. & SHE Cess was exempted on goods.
• The applicant had filed their ER-I Return for the month of February on 11.03.2015, wherein they had shown the unutilized portion of Education Cess /S. Higher Education Cess at Rs.3,27,325/-. The appellant kept carrying forward the said balance and thereafter, utilized the same for payment of excise duty in the month of December, 2016, 
• In the year June-July, 2018, Revenue pointed out that the appellant have wrongly utilized the cenvat credit of Education Cess and SHE Cess of Rs.3,27,325/- , which was not available to them under the amended provisions of Cenvat Credit Rules, read with notification.
• Aggrieved from the subsequent orders, this appeal is filed.

Issue:

• Whether the Appellant was eligible for Cenvat credit of EC and SHEC ?

Order:

• The authorities observed that in the case of Bharat Heavy Electricals Ltd. Vs. Commissioner, CGST [2020-TIOL-1341-CESTAT- Delhi] the Tribunal held that an assessee is entitled to refund of unutilized cess under the existing law, lying in credit as on 30/06/2017. 
• The authorities observed that had the appellant not utilized the Cenvat credit of EC & SHEC for payment of output tax/duty in December 2016, the same would have become refundable as on 30/06/2017. If the appellant is required to deposit the said amount of Rs. 3,27,325/- in cash, it will become entitled to a refund of the duty earlier paid by utilization of credit of EC & SHEC, thus the situation is wholly revenue neutral.
• The authorities set aside the impugned order.