2008 (6) TMI 617 - HC - Central Excise

Limitation on CENVAT Credit: Bombay HC Rules 50% Only, Excludes Sales Tax

The Bombay HC held that only 50% credit was permissible, not 100%, and sales tax could not be included in the CENVAT account. - TMI Summary order. Appeal admitted and two substantial questions of law framed for determination: (i) whether the CESTAT was correct in law in allowing 100% CENVAT credit when, under the existing CENVAT Credit Rules, only 50% credit is admissible for the current financial year; and (ii) whether credit of sales tax can be allowed in the CENVAT account when it is not admissible. The Bombay High Court admitted an appeal regarding substantial questions of law related to CENVAT credit rules. The questions include the correctness of allowing 100% credit when only 50% is admissible and the inclusion of sales tax in CENVAT account when not permissible.