CESTAT Rejects The Refund Claim Of Krishi Kalyan Cess Worth Rs. 5 Lakhs Paid On Services Received For Manufacturing Of Goods

The Hyderabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has rejected the refund claim of Krishi Kalyan Cess (KKC) worth rs. 5 lakhs paid on services received for manufacturing of goods.The two-member bench of Anil Choudhary (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that an unused portion of Cenvat credit cannot be claimed as a refund in cash.The appellant/assessee claimed the refund of Krishi Kalyan Cess paid on services received for the manufacture of goods, namely transportation of goods, manpower supply and recruitment, maintenance and repair service, and technical testing and analysis service, totaling Rs. 5,46,759.The department held that the appellant is not entitled to transmit the amount of KKC to the GST regime. The credit of the cess was meant to be used only towards payment of KKC on output taxable services. Thus, refunds are not permitted.The assessee assailed the order under Rule 3(1) of the CCR, 2004, and contended that an assessee, a manufacturer, can avail of Cenvat credit and utilize it towards payment of either central excise duty or service tax. The Cenvat Credit Rules permit availment and utilization of Cenvat credit under a common pool, and there is no restriction placed to the effect that Cenvat credit balances should be maintained separately for the manufacture of excisable goods and for use in the provision of services.The CESTAT rejected the amount of refund for KKC of Rs. 5,46,759, following the ruling of the larger bench in the case of Gauri Plastic Culture Pvt. Ltd.Case Title: M/s Lupin Limited Versus Commissioner of Central Tax & Customs (Appeals), GunturCitation: Service Tax Appeal No. 30105 of 2020Date: 16.03.2023Counsel For Appellant: Bharat Raichandani, Rishab JainCounsel For Respondent: A.V.L.N. CharyClick Here To Read The Order

CESTAT Rejects The Refund Claim Of Krishi Kalyan Cess Worth Rs. 5 Lakhs Paid On Services Received For Manufacturing Of Goods

Mariya Paliwala

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