Cenvat credit on service tax paid to a works contractor

This query is : Resolved

CA Manikandan.A.V (Querist)
Follow

16 July 2012 We have paid service tax @ 12.36% raised through an invoice by a works contractor. We are a manufacturing company, we use power as one of the main element of production, the works contract was for getting a new dedicated Electricity line. Are we eligible to take cenvat credit?

RENGARAJ R.K

RENGARAJ R.K (Expert)
Follow

17 July 2012 Is this transaction prior to 01.07.2102?

Any how, as per the cenvat rules, if the input service has a direct relation with the output taxable service then cenvat credit is possible.

In my opinion, on going thro your statement the input services can be availed since the service is related to output service. Now the rules are amended to cross utilisation both for excise and service tax and therefore credit can be accumulated but before utilising the credit, please inform the department to avoid litigation.