Cenvat Credit Rules amended – Service exporters eligible for refund
but important changes yet to come
The Cenvat Credit Rules have been amended to bring in certain long overdue changes. As per Rule 5 of the Cenvat Credit Rules, Exporters who cannot use their cenvat credit are allowed a refund of the credit utilized. This facility is allowed to the manufacturers and service providers, but somehow the Rule omitted service providers and the omission continued for nearly two years. Similarly the refund was not available if rebate was claimed under Central Excise Rules but forgot to mention rebate under Service Tax. Of course this did not matter, as according to the rules the service exporters were any way not eligible for refund. This lapse is now rectified. Any rectification is good any time and Board deserves all praise.
But then Board has totally forgotten about the required amendments consequent to the 2006 budget. There is a formula for taking credit on inputs received from EOUs. Now the formula is meaningless in view of the changed amount of duty payable by EOUs. With the budget most likely to be passed next week, Board can slip in this notification too.
NOTIFICATION NO. Dated 14 March, 2006