Education Cess exemption and credit utilisation were confined to the levy itself, not basic excise duty.

Education Cess on goods was not covered by Notification No. 32/99-CE dated 8-7-1999, so the exemption did not extend to that levy. The CENVAT scheme also confined credit of Education Cess to discharge of Education Cess itself; it could not be used for payment of basic excise duty. On these conclusions, the petitions failed and the challenge to refund and credit utilisation was rejected.

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Issues: (i) Whether Education Cess on goods was exempted under Notification No. 32/99-CE dated 8-7-1999; (ii) whether CENVAT credit of Education Cess could be utilised towards payment of basic excise duty under the CENVAT Credit Rules, 2004.

Issue (i): Whether Education Cess on goods was exempted under Notification No. 32/99-CE dated 8-7-1999.

Analysis: The entitlement to exemption depended on the scope of the notification and its application to Education Cess. The question had already been considered in the connected reference, and the same reasoning governed these petitions.

Conclusion: Education Cess on goods was not exempted under Notification No. 32/99-CE dated 8-7-1999.

Issue (ii): Whether CENVAT credit of Education Cess could be utilised towards payment of basic excise duty under the CENVAT Credit Rules, 2004.

Analysis: The credit scheme permitted utilisation of Education Cess credit only for discharge of the corresponding levy. It could not be diverted for payment of basic excise duty.

Conclusion: CENVAT credit on Education Cess could be utilised only towards payment of Education Cess and not towards payment of basic excise duty.

Final Conclusion: The petitions failed on both questions and the challenge to refund and credit utilisation was rejected.

Ratio Decidendi: Education Cess is not covered by the cited exemption notification, and credit of Education Cess is confined to payment of Education Cess alone.

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