AED credit cannot be used for paying BED but is the converse true?
The Cenvat/Modvat Credit Rules had a provision that the credit of AED can be used only for payment of AED. Even a child will know that this provision does not bar credit of excise duty being used for payment of AED. AG doesn’t agree. The Department replied that that the rule did not contain any prohibition for utilisation of credit of basic excise duty for payment of AED (GSI). AG was not impressed. The report says
Reply of the Ministry is not tenable as rule 57AB(2)(b) specifically debars utilisation of credit of AED (GSI) for payment of other duties.
Yes Sir, the Rule does so but it does not bar BED from being used for AED. If the AG’s logic is extended, credit of excise duty cannot be used for paying education Cess. But that will be a future day’s objection. I only hope I am not giving ideas to AG!
I know I am doing a great injustice to my profession by pointing out these Audit objections. I am aware of the fact that the whole tribe of consultants live and thrive on these objections if there is no Audit, there will be no consultants. AG is our ‘anna datha’. On behalf of the Tax Consultants, I should say, “anna datha, sukheebhava”. Long Live Audit! In their activity alone lies our prosperity!