Utilisation of cenvat Credit in payment of amount payable under Rule 6(3) of Cenvat Credit Rule

[onkar kumar]

Dear members

 

I want your view on the topic mentioned below

There is a provision to pay an amount 5% under Rule 6(3) of  Cenvat Credit Rule, 2004. Certainly it is not duty of excise but it is an obligation on the manufacturer/ service provider in a specific condition mentioned therein.

 

Now, Rule 3(4) of Cenvat Credit Rule specify the payments in which cenvat credit may be utilized. In this rule there is no where mentioned  for amount payable under Rule 6(3) but in explanation - II below Rule 6(3A) stipulates that this amount can be paid by utilizing Cenvat Credit. Thus, this explanation is in contrary to rule 3(4) of  Cenvat Credit Rule, 2004

 

Thank You

AI Summary

Clarifying Cenvat Credit use under Rule 6(3): Is the 5% obligation a reversal or an excise duty? A discussion on the utilization of Cenvat Credit under Rule 6(3) of the Cenvat Credit Rules, 2004, highlights a discrepancy between Rule 3(4) and an explanation under Rule 6(3A). The initial query questions whether Cenvat Credit can be used to pay the 5% obligation under Rule 6(3), which is not explicitly mentioned in Rule 3(4). One respondent argues that Rule 3(4) restricts Cenvat Credit use to specified duties, while another clarifies that the 5% is a reversal obligation, not an excise duty, as per a 2008 circular.