Non obstante credit entitlement under Rule 6(5) overrides general Cenvat restrictions where the service is not exclusively exempted.

Rule 6(5) of the Cenvat Credit Rules, 2004, which contains a non obstante clause, permits full credit of service tax on specified input services even where separate accounts are not maintained, and it operates independently of the general restriction in Rule 6(3)(c). Where the service falls within the enumerated category and is not used exclusively for exempted goods or exempted services, 100% Cenvat credit remains available. On that construction, the demand for service tax, interest, and penalties lacks foundation and cannot survive once credit is admissible.

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Issues: Whether the appellant was entitled to avail full Cenvat credit under Rule 6(5) of the Cenvat Credit Rules, 2004, despite not maintaining separate accounts and despite the restriction in Rule 6(3)(c); and whether the demand of service tax, interest, and penalties could survive.

Analysis: Rule 6(3)(c) restricts utilisation of credit where separate accounts are not maintained, but Rule 6(5) begins with a non obstante clause and specifically permits credit of the whole of the service tax paid on the taxable services listed therein, unless such services are used exclusively for exempted goods or exempted services. The input service in question fell within the specified category, and there was no finding that it was used exclusively for exempted services. On that construction, Rule 6(5) operates independently of Rule 6(3)(c), and the appellant was entitled to full credit. Once the credit was held admissible, the foundation for demand, interest, and penalties ceased to exist.

Conclusion: The appellant was entitled to 100% Cenvat credit under Rule 6(5), and the demand, interest, and penalties were unsustainable.

Ratio Decidendi: A specific credit-entitlement provision containing a non obstante clause prevails over a general utilisation restriction and allows full credit where the service falls within the enumerated category and is not used exclusively for exempted outputs.

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