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

Cenvat credit utilisation: whether the Rule 6(3) five percent obligation may be discharged by adjusting Cenvat credit balances.
Whether the 5% amount under Rule 6(3) CCR 2004 may be paid using Cenvat credit is disputed: Rule 3(4) lists permitted utilisations and omits Rule 6(3), suggesting non permissibility, while Explanation II to Rule 6(3A) and administrative guidance treat the 5% as a reversal of Cenvat credit rather than a separate duty, implying it is met by adjusting credit balances.