Cenvat Credit on Clean Energy Cess on Coal

[Vaidyanathan Venkat Raman]

Sir,

Clean Energy Cess levied from July 2010 on domestic and imported coal @ ₹ 50 / ₹ 100 PMT

​Karnataka High Court in Renuka Sugar allowed Cenvat Credit on Sugar Cess even though it is not specified under Rule 3 CCR (deptt appeal pending before Supreme Court)

Whether we can still avail cenvat credit on Clean Energy Cess from July 2010 onwards in Aug-2014 (but not utilise it) as time limit of six months for Input and Input Service will apply w.e.f. 01.09.2014

Pl give suggestions / reply

Rgds

Venkat

AI Summary

Cenvat credit eligibility denied for Clean Energy Cess; cess must be paid in cash and is additional to other duties.
Rule 3 of the CENVAT Credit Rules, 2004 does not list Clean Energy Cess on coal as an eligible duty, so credit cannot be taken; moreover, proviso to Rule 3(4) prohibits utilisation of CENVAT credit for payment of the Clean Energy Cess, requiring the cess to be paid in cash. Finance Act provision treats the cess as additional to other duties and cesses on coal. A favourable High Court decision on another cess is under appeal, prompting some to recommend awaiting the Supreme Court outcome.