Cenvat credit

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2013 Sir,
we are importing inout material & pay basic Custum duty at 2.5%, Basic Excise duty 12% & Coustom Edu Cess 2% , Custom sec & Highwe ddu duty 1% & 4% Add. excise

We are taking credit for basic & add Excise duty

My qusetion is can we utilized credit against Custom Edu cess 2% & Sec. Hig.edu Cess 1% while paying Excise duty ?

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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08 November 2013 Input CENVAT Credit can be used to pay Excise Duty, Service Tax or the excise component of Customs Duty. As long as proper input documents exist, it is not relevant from which source the CENVAT Input was availed.

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2013 Sir,
is there any notification no regarding this please mentioned i will go through

Thanks for replaing my question

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Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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10 November 2013 You are requested to refer to the decision of the Zonal Bench of CESTAT Mumbai in the case of Jyoti Structures Ltd. Versus Commissioner of Central Excise, Nasik [2012 (10) TMI 335- CESTAT, Mumbai]. This decision was given in October 2012 and till date the Department has not filed any appeal against this decision.

. The provisions of availment of Cenvat credit under Rule 3 of Cenvat Credit Rules, 2004 is relevant in this case and as per Rule 3(1) of Cenvat Credit Rules, 2004 “a manufacturer and provider of taxable services shall be allowed to take credit of Service Tax leviable under Section 66 of the Finance Act. [“(ixb) the service tax leviable under section 66B of the Finance Act” inserted effective from 1-7-2012 vide Notification No. 28/2012-CE (NT) Dated 20/06/2012]

There is no rule providing for segregation of the CENVAT credit availed on the input services used by the appellant in their manufacturing activity or output services but it is important to note:

Rule 9(5) of the Cenvat Credit Rules, which stipulates that the manufacturer of final products or the provider of output service shall maintain proper records for the receipt, disposal, consumption and inventory of the input and capital goods in which the relevant information regarding the value, duty paid, CENVAT credit taken and utilized, the person from whom the input or capital goods have been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit.

Rule 9(6) of the Cenvat Credit Rules, which provides that the manufacturer of final products or the provider of output service shall maintain proper records for the receipt and consumption of the input services in which the relevant information regarding the value, tax paid, CENVAT credit taken and utilized, the person from whom the input service has been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit.

The res judicata of this decision is that it is not necessary to directly link the input credit to the output product / service. All that is needed is to prove that there was an eligible input which has been utilized in paying the output of a taxable product or service. THE BURDEN OF THIS PROOF, IS ON THE ASSESSEE.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2013 Thanks sir !

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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12 November 2013 You are most welcome.

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2013 we have utilized additional duty to pay 2% & 1% , Department not accepted that additional duty can utilized towards payment of 2% & 1% however they asking to pay duty in cash. we utilized duty in reference to section 3 of the customs tariff act equivalent to the duty of excise specified under (i) , (ii) & ( iii) after justification department drop down the point from there Demand & also CERA Audit not raise the point in their Audit , But now department once again asking to pay duty in cash , please tell me how to handle this issue ?