CENVAT Credit on service tax paid under Sec 66A – Thank God!!! There is a retrospective amendment now

NEW DELHI, FEB 28, 2011: FOR a long time, officers of the department were not willing to accept that the service tax paid under Section 66A is eligible for CENVAT Credit. Their point is that Rule 3 of the CENVAT Credit Rules 2004 only specifies  the service tax leviable under section 66 of the Finance Act as eligible for CENVAT Credit, but not service tax leviable under Section 66A.

Board had boldly clarified on many occasions that CENVAT Credit is admissible on the service tax paid under Section 66A, but the field officers are not willing to go by the Board Circulars. To put the dispute to rest, now a retrospective amendment is proposed in the Finance Bill to Rule 3 of the CENVAT Credit Rules 2004 to include Service tax paid under Section 66A of the Finance Act, 1994 in the duties specified for the taking credit. However, the amendment is proposed only with effect from 18.4.2006, but what if somebody pays service tax before 18.4.2006? Another round of  litigation?