Cenvat Credit of CESS & SHECESS

[Vivek anandhan]

Dear Experts

We are the manufacturing Concern and we are availing CENVAT credit for our inputs. After withdrawn of CESS & SHECESS in last budget, Some of our supplier(Dealer) charging CESS & SHECESS for their old stock clearance during April'15 to till date. Whether we can avail this CESS & SHECESS and utilise for duty payment.

Regards

Vivekanandhan

Notification No. 12/2015 – CE (NT) dated 30-04-2015, which is reproduced below for your convenience:

“2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 3, in sub-rule (7), in clause (b), after the second proviso, the following shall be substituted, namely:-

“Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise leviable under the First Schedule to the Excise Tariff Act.

[DR.MARIAPPAN GOVINDARAJAN]

Yes, you can utilize.

[Ganeshan Kalyani]

I would like to discuss further on the credit of education cess and secondary and higher education cess lying as of 28.02.2015. What if the credit is availed? I could not recollect right now the article I read where the author justified that credit lying as of 28.02.2015 should be eligible. Kindly discuss on the subject.

[Ganeshan Kalyani]

The credit of Education Cess and Secondary and Higher Education Cess on goods received after 28.02.2015 is available. However there is no clarity as regards the credit of Education Cess and Secondary and Higher Education Cess lying as of 28.02.2015. Department objects utilization of such credit in absence of clarificatory notification. Big big industries are waiting for such clarification from department. I think the assessee should make noise to allow the credit of 2% & 1& credit lying in the books as of 28.02.2015.

[Ganeshan Kalyani]

The question shall prevail endless or should a clarification be awaited for the Ed. Cess and SH Ed.Cess credit lying in books as of 28.02.2015 from CBEC.

AI Summary

Cenvat credit of education cess can be used to pay excise duty when paid on inputs received after the notified effective date.
An amendment permits utilisation of education cess and secondary and higher education cess credit for payment of excise duty where such cess was paid on inputs or capital goods received in the factory of manufacture on or after the effective date; credits reflected in books prior to that date remain of unclear admissibility and await departmental clarification.