TaxTMI 
TaxTMI 
As per budgetary changes Education Cess and Secondary Higher Education Cess are exempt vide Noti. No. 14/2015 and 15/2015 w.e.f. 01/03/2015. However, there is no clarification with regards to balance of Education Cess and Secondary Higher Education Cess lying in Cenvat Account as on 28/02/2015. Please clarify whether balance of Education Cess and Secondary Higher Education Cess lying in Cenvat Account as on 28/02/2015 stand laps or to be carried forward and merged with balance of Basic Excise Duty and utilize the same for normal payment of duty?
Education Cess / Secondary & Higher Education Cess
29 Aug 2015 
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Cenvat credit utilization: closing education cess balances face restriction absent rule amendment; seek clarification or litigate for relief.
With cessation of Education Cess and SHE Cess from 1 March 2015, unutilized cess credits as on 28 February 2015 cannot be lawfully set off against basic excise duty absent an express amendment to the Cenvat Credit Rules; subsequent amendments and notifications permit utilization only for cess credits attributable to inputs or services received after the notified date. Assessees may retain balances pending departmental clarification, apply them only to past cess liabilities, or use them and litigate after informing the department to obtain appellate determination. (AI Summary)
With cessation of Education Cess and SHE Cess from 1 March 2015, unutilized cess credits as on 28 February 2015 cannot be lawfully set off against basic excise duty absent an express amendment to the Cenvat Credit Rules; subsequent amendments and notifications permit utilization only for cess credits attributable to inputs or services received after the notified date. Assessees may retain balances pending departmental clarification, apply them only to past cess liabilities, or use them and litigate after informing the department to obtain appellate determination. (AI Summary)