cenvat utilization

[MITSUI PRIME ADVANCED]

Dear Sir,

Good Morning

Pl. advice we can utilize payment of Education Cess and S H Education Cess from Excise Cenvat Account 12 percent or Service TAx 12 percent .

PL. advice

Thanks & Regards

RajKumar

[YAGAY andSUN]

Dear RajKumar,

Yes, you may.  Please check Rule 3 of the CENVAT credit Rules, 2004 in this regard.

Thanks

Team YAGAY & SUN

(Indirect Tax Consultants)

[MITSUI PRIME ADVANCED]

Dear Sir,

pl.advice

in law Cenvat  Credit build up out od Education Cess can be utilized only for payment of education cess on excise duty and service tax. it can not be utilized for payment of excise duty. service tax and S H Education Cess.

Under Proviso to rule 3(7)(b) of CCR.

not have any mentioned clearly law is total silent in such cases but as per prov. Rule  3

as per discussed with superintendent told me told me you can not adjust.

pl. advice again

Thanks for cooperate in advice.

Thanks & Regards

Rajkuamr

[MITSUI PRIME ADVANCED]

Dear Sir,

Good Morning

Pl. advice we can utilize payment of Education Cess and S H Education Cess from Excise Cenvat Account 12 percent or Service Tax 12 percent .

in law Cenvat  Credit build up out od Education Cess can be utilized only for payment of education cess on excise duty and service tax. it can not be utilized for payment of excise duty. service tax and S H Education Cess.Under provided  to Rule 3(7) (b) of CCR.

Pl explain rule 3(7)(b) effect on rule 3(4) , 3(1) not have any mentioned clearly law is total silent in such cases pl. advice again

Thanks for cooperate in advice.

Thanks & Regards

Arjun Sachdeva

[v n]

in terms of the restrictions stipulated under Rule 3(7)(b) of Cenvat Credit Rules 2004, the credit of the named duties including Education cess can only be utilized for payment of the said duties alone, as a result of which credit of Education cess can be utilized for only paying of Education cess and not other kind of duties.  This restriction cannot be extended to credit of duties not specifically listed under Rule 3(7) ibid.  Hence, credit of duties specified under Rule 3(4)  read with Rule 3(1) ibid can be utilized for payment of education cess/SAH education cess, but vice versa is not permissible.  

[MITSUI PRIME ADVANCED]

Dear Sir,

Please  advice once again

as per Rule 3(7) NOTWITHSTANDING ANYTHING CONTAINED IN SUB RULE (1) AND SUB RULE (4) 

 RULE 3(7)(B) ALSO AUTOMATIC Attract on sub rule 1, 4  ( means rule 3(1), and rule 3(4)

Pl. advice.

   Thanks for your co-operation in advance.

Thanks & Regards

Arjun

[Krishan Gopal]

This is a very disputed issue and the judgment are either side. You can check the Cenvat Credit Rule (Rule 3(4)) (as per rule we can claim) in this regard check -BBF Industry, Sun pharmaceutical Industries judgments.in favour of assessee but in case of Bharat box Factory Ltd (Tri-Delhi) no use basic excise duty to make payment of Edu.cess & SHE cess. Yes, Sir, this judgment is very strange and in the matter of units availing area based exemption (i.e. in some state order passed in favour of assessee, where assessee can claim), such judgments are being passed. Till now there is no judgment come form supreme court.

AI Summary

Cenvat credit limitation: Education cess credit may be used only to discharge education cess, not other duties or service tax. Credit of education cess in the Cenvat account can be utilised only to discharge education cess (including secondary and higher education cess) and not to pay basic excise duty, service tax or other duties; credits permitted under general utilisation rules may fund payment of education cesses, but the reverse cross utilisation is not allowed. The proviso based restriction operates notwithstanding broader sub rules on credit usage, and judicial authorities have reached conflicting conclusions on this point.