Assessee Entitled To Refund Of Education Cess And Krishi Kalyan Cess Lying Unutilized In CENVAT Account: CESTAT

The appellant/assessee is in the business of providing dredging services and is registered with the department for the services rendered by them. They filed a refund claim under section 11B of the Central Excise Act, 1944 on 5.2.2020 for the refund of unutilized CENVAT credit availed on education cess, secondary and higher education cess, and Krishi Kalyan cess.

The CENVAT credit in respect of education cess, secondary and higher education cess and Krishi Kalyan cess to TRAN-1 was carried forward after the introduction of GST. The assessee has claimed a refund of the education cess, secondary and higher education cess and Krishi Kalyan cess lying unutilized in their CENVAT account. After due process of law, the original authority rejected the refund claim. The original authority held that under section 140 of the CGST Act, 2017, a refund can be sought only for eligible duties and that duties exclude refund of cess. The appellant filed an appeal before the Commissioner (Appeals), who upheld the rejection of the refund claim.

The appellant relied on the decision of the Madras High Court in the case of Sutherland Global Services Pvt. Ltd. Vs. UOI. The Madras High Court held that the assessee is eligible for a refund of the balance amount of credit of cess lying in the CENVAT account.

The issue raised was whether the appellant was eligible for a refund of education cess, secondary and higher education cess and Krishi Kalyan cess lying unutilized in their CENVAT account.

The CESTAT ruled that the assessee is entitled to a refund of the cesses accumulated as a cenvat credit balance.

Case Title: M/s. International Seaport Dredging Pvt. Ltd. Versus Commissioner of GST & Central Excise

Citation: Service Tax Appeal No.40436 of 2021

Dated: 17.06.2022

Counsel For Appellant: Advocate Mihir Deshmukh

Counsel For Respondent: ADC K. Komathi

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