Cenvat credit utilisation for NCCD held permissible where no specific restriction existed under the rules for the relevant period.

For the period before the restrictive proviso introduced in 2008 and the later absolute restriction in 2016, Cenvat credit of basic excise duty could be used to pay National Calamity Contingent Duty (NCCD). Rule 3(1) created the credit pool and Rule 3(4) permitted utilisation of such credit for payment of duty of excise on the final product, and the Tribunal found no specific bar in the Cenvat Credit Rules for the relevant period. It distinguished precedent on exemption notifications and noted that a restriction on using NCCD credit did not imply a converse prohibition on using basic duty credit for NCCD. The assessee's utilisation of credit was upheld and the Revenue challenge failed.

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Issues: Whether, for the period prior to 01.03.2008 and before the later restriction introduced in 2016, Cenvat credit of basic excise duty could be utilised for payment of National Calamity Contingent Duty (NCCD).

Analysis: Rule 3(1) of the Cenvat Credit Rules, 2004 formed the credit pool from which credit could be taken, and Rule 3(4) permitted utilisation of such credit for payment of any duty of excise on any final product, subject to the restrictions contained in the Rules. The Tribunal noted that prior to the insertion of the restrictive fifth proviso in 2008 and the later absolute restriction in 2016, no provision barred utilisation of basic excise duty credit for payment of NCCD. It further distinguished the precedent concerning exemption notifications, holding that the question there was different from the present question of credit utilisation under the Cenvat Credit Rules. The Tribunal relied on the earlier view that the converse restriction on NCCD credit did not imply a prohibition on using basic duty credit for NCCD.

Conclusion: The respondent was entitled to utilise Cenvat credit of basic excise duty for payment of NCCD for the relevant period; the Revenue's challenge failed.

Final Conclusion: The impugned order sustaining the assessee's utilisation of credit was upheld and the Revenue appeals were dismissed.

Ratio Decidendi: In the absence of a specific restriction under the Cenvat Credit Rules for the relevant period, credit of basic excise duty could be used to discharge NCCD liability on the final product.

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