Cenvat credit for basic excise duty remained usable against additional duty of excise after the 2003 amendment.

Rule 3 of the Cenvat Credit Rules, 2002 permitted credit of excise duty to be taken and used for payment of any kind of duty of excise. The amendment by Notification No. 19/2003-C.E. (N.T.) allowing credit for additional duty of excise did not restrict use of basic excise duty credit already lying as on 1-3-03. As additional duty of excise is itself a duty of excise, the pre-existing basic excise duty credit remained utilisable for that liability. The Department's appeals were dismissed.

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Issues: Whether credit of basic excise duty lying as on 1-3-03 could be utilized for payment of additional duty of excise after the amendments to Rule 3 of the Cenvat Credit Rules, 2002 and the relevant notifications.

Analysis: Rule 3(3) of the Cenvat Credit Rules, 2002, as amended, permitted Cenvat credit of duty of excise to be taken and utilized for payment of any kind of duty of excise. The subsequent amendment by Notification No. 19/2003-C.E. (N.T.) enabling credit of additional duty did not exclude the otherwise permissible use of credit of basic excise duty. The reasoning applied was that additional duty of excise is also a duty of excise, and the amendment did not impose a restriction barring utilization of basic duty credit for that purpose.

Conclusion: The credit of basic excise duty available prior to 24-3-03 was correctly held to be utilizable for payment of additional duty of excise, and the Department's appeals were rightly dismissed.

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