Time limit for taken credit of service tax

This query is : Resolved

Rakesh Sharma (Querist)
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03 August 2013 We are manufacturing & excisable unit. We have not taken service tax for the period from 01-04-2013 to 31-05-2013. Now today, can we take the same.

What is time limit for taken service tax credit?

Thanks in advance.

CA Pradeep Sharma

CA Pradeep Sharma (Expert)
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03 August 2013 Hello Friend,

There is not time limit mentioned in any Act regarding input of excise duty or input service tax.

Reference:

This was the issue before the CESTAT.

The appellants took CENVAT credit in the year 2009 for the period from October 2004 to March 2009. By a show cause notice, as the CENVAT credit has not been taken within a reasonable time period of one year, proposed to levy penalty and interest. Both the lower authorities confirmed the demand by denying the CENVAT Credit and imposed interest and penalty. Aggrieved by this order, the appellants filed appeal before CESTAT.

CESTAT observed that nowhere in the Central Excise Act as well as in the CENVAT Credit Rules prescribed any period in which credit has to be taken. Although it is mentioned in the CENVAT Credit Rules that assessee can take the credit immediately, but there is no prescribed time limit either in the CENVAT Credit Rules or in the Central Excise Act.

The observation made by both the lower authorities that credit is to be taken within a period of one year is totally incorrect and unacceptable. In view of this observation, impugned order is set aside and the appeal is allowed with consequential relief if any.