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TMI Blog2009 (4) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... he plea that the restriction in the sub-rule applied only to duty of excise; restriction did not cover education cess which was not duty. Adjudicating the allegation of irregular availment of education cess to the tune of Rs. 2,68,547/- being 50% of education cess paid on capital goods received by the appellants during the material period, the original authority demanded the excess credit availed along with interest. In the impugned order, the Commissioner (Appeals) found that the education cess imposed under the Finance Act, 2004 was a duty of excise and the restriction envisaged in sub-rule 2(a) of Rule 4 of CCR applied to education cess as well. 2. After hearing both sides on the application for waiver of pre-deposit, I find that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts, or provider of output service in such subsequent years." As per sub-rule 2(a) above, Cenvat credit in respect of capital goods received in a factory shall be taken for an amount not exceeding 50% of the duty paid on such capital goods [excluding the entire additional duty in terms of sub-section (3) of Section 5 of Customs Tariff Act] plus the entire additional duty in terms of sub-section (3) of Section 5 of Customs Tariff Act, in the same financial year. Duty for the purpose of Cenvat credit is not defined in the CCR. Sub-rule (1) of Rule 3 of CCR defines Cenvat credit as duties of excise, additional duty of excise, additional duty of customs, education cess, etc., levied under different enactments eligible for Cenvat credit. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer can avail up to 50% of duty in the year of receipt of the goods and the balance Cenvat credit in the ensuing years. Moreover as per Clause 93 of the Finance Act, 2004, education cess shall be a duty of excise. The import of sub-rule (2)(a) can only be that 50% of the Cenvat credit (excluding additional duty of customs) and entire additional duty of customs specified can be availed in the year of receipt of the goods; otherwise, no part of education cess can be availed in the year of receipt of capital goods. In the circumstances, I hold that the restriction envisaged in the sub-rule (4) of CCR encompasses also the Cenvat credit of education cess admissible to the assessee on receipt of the capital goods. I do not find any reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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