Cenvat credit may be used for education cess, and no substantial question of law arose in the tax appeal.

Utilisation of eligible Cenvat credit for payment of education cess was treated as permissible under Rule 3(7)(b) of the Cenvat Credit Rules, 2004, and the Tribunal's view to that effect was upheld. Because the Tribunal had correctly applied the settled position, the High Court found that the departmental appeal did not raise any substantial question of law under Section 35-G of the Central Excise Act, 1944, and the challenge failed.

---

---

Issues: Whether, under Rule 3(7)(b) of the Cenvat Credit Rules, 2004, credit of basic excise duty could be utilised for payment of education cess, and whether the appeal raised any substantial question of law under Section 35-G of the Central Excise Act, 1944.

Analysis: The Tribunal had followed its earlier view that utilisation of credit of basic excise duty for payment of education cess was permissible. The High Court agreed with that view and held that the appeal did not give rise to any substantial question of law.

Conclusion: The issue was answered against the Revenue and in favour of the assessee, and the appeal was dismissed.

Final Conclusion: The impugned order was upheld and the departmental challenge failed for want of any substantial question of law.

Ratio Decidendi: Where the Tribunal has correctly applied the settled position permitting utilisation of eligible Cenvat credit for payment of education cess, no substantial question of law arises in a tax appeal under Section 35-G of the Central Excise Act, 1944.

---