Utilization of accumulated Cenvat credit restricted in terms of Erstwhile Rule 6(3)(c) of Cenvat Credit Rules, 2004 - Regarding

Cenvat credit utilization: accumulated credit balances not to be denied where no explicit prohibition exists under amended rules.

Amendment to Rule 6(3) offers two options to account for credit attributable to exempted supplies-payment of prescribed percentages of exempted values or payment equal to attributable Cenvat credit. Because the rule contains no explicit prohibition or lapse provision, accumulated Cenvat credit balances existing at the time of amendment should not be denied utilization for service tax payment, and the taxpayer's substantive right to take and utilize credit must be respected.