HC
quashes writ petition of Cellular Operators Association seeking to quash
Notification No. 22/2015-CE (NT) as being violative of Articles 14, 19(1)(g),
265 and 300A of Constitution of India, holds that accumulated credit of
Education Cess and Secondary & Higher Education Cess post abolition, cannot
be cross-utilised for payment of excise duty / service tax; Rejects
Association’s reliance on TRU’s explanation dated February 28, 2015 as well as
claim of vested right to avail benefit of unutilized credit since EC and SHE
were ‘subsumed’ in increased rates of excise duty (from 12% to 12.5%) and
service tax (from 12.36% to 14%) w.e.f. March 1, 2015 and June 1, 2015
respectively; Referring to Finance Minister’s speech and explanatory Memorandum
to Finance Bill 2015, HC states that no statement or assertion was made that
benefit of unutilized EC and SHE credit would be available against excise duty
/ service tax and use of word ‘subsumed’ could indicate that there would not be
an increased tax burden on taxpayers on account of EC and SHE withdrawal;
Observes, “Any exercise of increasing taxes and withdrawing a cess or a tax is
undertaken keeping in mind several aspects. This can include revenue collection
in the form of increased taxes on one hand, and withdrawal or reduction of cess
or another tax so as to curtail the adverse impact due to increase. Budgets do,
and are, a balancing exercise”; Opines, while it is true that the two Cesses
were in nature of taxes and not fee, it would be incorrect and improper to
treat them as excise duty or service tax, they were specific Cesses for the
objective and purpose so specified; Remarks, “Omission of a provision signifies
deletion of that provision and is normally not treated as different from
repeal” while stating that repeal / omission in present case was not made
retrospectively, but applied prospectively; Elucidates that amendment to CENVAT
Credit Rules 2004 incorporating provisos (3) to (8) to Rule 3(7)(b) are in
nature of concessions confined to a limited and narrow set of cases where
capital goods / inputs / input services were received by the manufacturer
/ service provider after March / June 2015; Said provisos are not of
general application, as they expand the scope and give benefit of utilization
of accumulated EC and SHE against payment of excise duty and service tax, which
was not the position prior to such dates, hence, “said classification would not
fall foul of vice of discrimination. Article 14 is not offended”; Relies on SC
rulings in Hingir-Rampur Coal Co. Ltd. and B.K. Industries, while
distinguishing SC ratio in Eicher Motors Ltd : Delhi HC
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