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Doubt on cenvat

SURENDRA (EMPLOYEEE) (52 Points)

06 May 2015

Dear all

we are the manufaturing company and at the same time we provide some erection services

here isssue is we have lot of input excise duty (bcs input is more then out put) and our out put service tax is more can we avail that input excise duty while payment of out put serv tax please let me know

thanks in advance

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Aditya RVS (Practice) (221 Points)
Replied 10 May 2015

Subject to the eligibility and other prescribed conditions, as per Rule 3(1) of CENVAT Credit Rules, read with rule 3(4) of the rules (enclosed below), input Credit may be taken on the duty of excise paid on eligible goods as specified and the same may be utilized for payment of Service Tax on any Output service.

Rule 3 (Relevant Extracts only)

(1) A manufacturer or producer of final products or a provider of output service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of—

(i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act:

Provided that CENVAT credit of such duty of excise shall not be allowed to be taken when paid on any goods—

(a) in respect of which the benefit of an exemption under Notification No.1/2011-CE, dated the 1st March, 2011 is availed; or

(b) specified in serial numbers 67 and 128 in respect of which the benefit of an exemption under Notification No. 12/2012-CE, dated the 17th March, 2012 is availed;]

(ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act;

(4) The CENVAT credit may be utilized for payment of—

(a) any duty of excise on any final product; or

(b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or

(d) an amount under sub-rule (2) of rule 16 of Central Excise Rules, 2002; or

(e) service tax on any output service:

Provided that while paying duty of excise or service tax, as the case may be, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty or tax relating to that month or the quarter, as the case may be: