Cenvat credit can be used for Education Cess and Secondary & Higher Education Cess despite exemption notification coverage.

Cenvat credit of basic excise duty could be used to discharge Education Cess and Secondary & Higher Education Cess, even where clearances were made under Exemption Notification No. 39/2001-CE. The Tribunal applied settled precedent, including SRF Nutrients and its own earlier orders, and held that the contrary demand could not be sustained. The operative effect was that utilisation of basic excise duty credit for these cesses remained permissible notwithstanding the exemption regime.

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Issues: Whether Cenvat credit of basic excise duty could be utilised for payment of Education Cess and Secondary & Higher Education Cess while availing Exemption Notification No. 39/2001-CE.

Analysis: The issue was treated as settled by prior decisions, including the Supreme Court's ruling in SRF Nutrients and the Tribunal's own earlier orders. The consistent view applied was that credit of basic excise duty is available for discharge of Education Cess and Secondary & Higher Education Cess even where clearances are made under the exemption notification.

Conclusion: The appellant was entitled to utilise the credit of basic excise duty for payment of Education Cess and Secondary & Higher Education Cess, and the contrary demand could not be sustained.

Ratio Decidendi: Where the issue has been settled by binding precedent, Cenvat credit of basic excise duty may be used to pay Education Cess and Secondary & Higher Education Cess notwithstanding availing of Exemption Notification No. 39/2001-CE.

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