Cenvat credit can be used to pay Education Cess when treated as duty of excise, absent any express bar.

Cenvat credit under Rule 3(4) may be used to pay duty of excise, and Education Cess levied under the Finance Act, 2004 is treated as such a duty. The restriction in Rule 3(7) applies only to the specified duties listed there and does not bar use of Basic Excise Duty credit for Education Cess. In the absence of any express prohibition, Basic Excise Duty credit remains available for that payment, and the Revenue's objection fails.

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Issues: Whether Education Cess can be paid by utilising Cenvat credit of Basic Excise Duty.

Analysis: Rule 3(4) of the Cenvat Credit Rules, 2004 permits utilisation of Cenvat credit for payment of duty of excise. Education Cess levied under Sections 91 and 93 of the Finance Act, 2004 is treated as a duty of excise. The restriction in Rule 3(7) applies only to the specified duties mentioned therein and does not extend to Basic Excise Duty credit. In the absence of any prohibition against use of Basic Excise Duty credit for Education Cess, the credit is available for such payment.

Conclusion: Education Cess can be paid by utilising Cenvat credit of Basic Excise Duty, and the Revenue's challenge fails.

Ratio Decidendi: Where the credit-utilisation rule permits payment of duty of excise and the restrictive provision is confined to specified duties, Basic Excise Duty credit may be used to discharge Education Cess treated as a duty of excise.

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