Basic excise duty credit can be used for Education Cess and Secondary Higher Education Cess under the area-based exemption scheme.

Credit of basic excise duty could be used to pay Education Cess and Secondary & Higher Education Cess while operating under Notification No. 39/2001-CE, an area-based exemption scheme. The issue had already been settled by the Supreme Court in SRD Nutrients Private Limited and later followed, including in Hitachi Home, so the question was not open for further reconsideration. The appellant's entitlement to utilise basic excise duty credit for payment of the cesses was affirmed, and the contrary order was found unsustainable.

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Issues: Whether credit of basic excise duty could be utilised for payment of Education Cess and Secondary & Higher Education Cess while operating under Notification No. 39/2001-CE, an area based exemption notification.

Analysis: The issue had already been decided by the Supreme Court in SRD Nutrients Private Limited and followed in later decisions, including the Supreme Court's disposal in Hitachi Home. In light of those rulings, the question was no longer open for reconsideration and the appellant's entitlement to use basic excise duty credit for payment of the cesses stood affirmed.

Conclusion: The appellant was entitled to utilise credit of basic excise duty for payment of Education Cess and Secondary & Higher Education Cess. The impugned order was unsustainable.

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