excise duty paid on input how to use if we are service provi

This query is : Resolved

Ashish (Querist)
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02 April 2009 Our company are in the business of printing our own advertising directory and magazines,manufacturers of diares for corporates,printing of annual reports etc.we also taking job work of printing others magazones etc.

we are registor under service tax as we have to charge service tax on Advtisement services to our customer who wish to give advertisemnet in our directory.our directory are distibuted on demand to anybody without any cost.
this directory is printed in our own factory only.we have to pay excise duty on paper,inks,and various consumable,disel and stores and spares etc.for printing this directory.We are treating the excise duty as a part of our total material and consumable cost.
We are not registered under Central Excise Act.

Query:

1) Can we take credit of Excise duty and utilise the same against service tax liability for our directory (under the category of sale of Space or time for Advertisement)

If we can take these credit please provide us the procedure and format of records to be maintained.

2) Can we correct our past records and intimate the department to avail the excise duty credit which we have not taken till date.

3)Please also confirm whether "printing of directory, Magazines, Catalogue etc. is not a manufacturing activity as per Excise and therefore exempt. Or it is excisable activity but subject to 0% excise duty.

Regards,

Dayal

Dayal (Expert)
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02 April 2009 The primary intention of the business is selling of space for advertisement

Printing of directory is meant for providing (selling space) services

This means you are not into printing or sale of directory but into sale of space for advertisement (correct me if I am wrong)

If the above is correct then since you are selling space, printing is secondary to rendering this services, therefore the credit of excise duty on inputs can be claimed by you as Cenvat on goods.

Cenvat provision allows credit on goods and services to a service provider, providing taxable output services.

In your case you are collecting service tax on outputs services and paying the same.

For previous period, take the credit but don’t utilize the same, until you have informed the department stating your contention.

If they object, seek advice from a learned consultant to support your views.