cenvat credit

Refund of Cesses In Cash Not Allowed

Service Tax - 1. FACTS OF CASES: 1. M/s Mylan Laboratories Ltd (appellant) is engaged in the manufacture of pharmaceutical and is 100% EOU. The appellant was availing the benefit of CENVAT credit under CENVAT Credit Rules 2004. The appellant filed a refund claim dated 04.01.2018 seeking refund of Rs 28,600/- of its unutilised balance of cesses lying [&...

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S 11B limitation held applicable in accumulated Cenvat credit refund is bad law—Part 2

Service Tax - In the first part of the article, it was evidently clear that the English language cannot do magic to imply limitation to be read in the law (when it is concluded by independent reading of the S 11B that no limitation is specified) merely by way of reference to the Section in the Notification....

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S 11B limitation held applicable in accumulated Cenvat credit refund is bad law- Part 1

Service Tax - Local taxes & duties cannot be exported & this is the principle followed the world over under the aegis of the WTO. This basic principle cannot be violated  & if the government does that by implying a limitation period not appearing in the law then it is violation of Basic Principles of Law. It is […]...

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Drawback on deemed supplies under FTP

Service Tax - In the present policy, the physical exports wherein goods move out of India are eligible for drawback and MEIS benefits. The deemed exports such as removal of goods to advance license holders / EOUs are eligible for duty drawback, refund of terminal excise duty for specified excisable goods and for advance license on annual basis....

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Reversal not required by Restaurants and Outdoor Caterers under Rule 6(3) of Cenvat Credit Rules, 2004

Service Tax - In the past, numerous show cause notices have been issued all over India by Service Tax Authorities to Restaurant Owners and Outdoor Caterers alleging non-reversal of Cenvat Credit under Rule 6(3) of the Cenvat Credit Rules, 2004 by the Restaurants and Outdoor Caterers and demanding Service Tax under Rule 14 of the Service Tax Rules read ...

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Download ICAI Technical Guide to CENVAT Credit

Service Tax - Introduction of CENVAT credit rules across goods and services in the year 2004 was one of the major steps in indirect taxes reform process. Since then these rules have undergone significant changes as the Government has addressed issues and difficulties faced by tax payers and also taken steps to reduce cascading of taxes. Union Budget [&...

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Summary of Performance Audit on Cenvat credit scheme.

Service Tax - We observed instances of non-submission of various prescribed returns by the assessees. Non-submission of returns would hinder the department’s ability to verify the duty paid by assessees, correctness of valuation, availing of Cenvat credit, ...

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Changes in Excise Duty Rates in Union Budget 2009

Service Tax - However, the said goods would be exempt from excise duty subject to non availment of Cenvat credit on input. [Notification No 30/2004-CE refers]. Thus, the exemption will be optional. Those opting to pay duty @ 4% will be eligible to avail Cenvat credit. The applicable rates for CVD purposes will be 4%....

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Certificate of CA or Bank sufficient to establish Linkage between FIRC & Export Invoice

Sentini Technologies Pvt Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad) - The issue under consideration is whether the export proceeds realised even before the invoices were issued are against exported services since FIRCs are also not show the invoice numbers?...

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Department cannot force Assessee to Reverse Credit Merely for non-Intimation made under rule 6 of CCR

Rockey Marketing (Chennai) Pvt. Ltd. Vs Commissioner of Service Tax (CESTAT Chennai) - The issue under consideration is whether department cannot force upon the assessee to reverse credit under Rule 6(3)(i) merely for the reason that no intimation under Rule 6 of CCR?...

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Cenvat Credit Can’t be Denied for Export of Exempted goods Outside India

Eastern Chemofarb Limited (DTA Unit) Vs Commissioner of Central Excise (CESTAT Kolkata) - The issue under consideration is whether the lower authority is correct in stating that the appellant is not entitled to avail credit of duty paid on inputs used in the manufacture of exempted goods since they have cleared the said exempted goods for export outside India?...

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CENVAT credit admissible for construction/setting up of landfill

Maharashtra Enviro Power Ltd. Vs. Commissioner of Central Excise (CESTAT Mumbai) - The issue under consideration is whether denial of CENVAT credit availed by the appellant for construction/setting up of landfill is justified in law?...

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ITC cannot be denied for charge by seller at Higher than specified rate

Visteon Automotive Systems Pvt. Ltd. Vs Deputy Commissioner (CT) (Madras High Court) - The issue under consideration is whether the respondent was justified in directing the petitioner to reverse the input tax credit availed on capital goods in excess of 4% vide the impugned order?...

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Provisions in Cenvat Credit Rules 2004 regarding reversal of credit

Circular No. 213/3/2019-Service Tax - (05/07/2019) - Is reversal under rule 6(3) of the Cenvat Credit Rules 2004 additionally required for all the services specified in notification 26/2012-Service Tax dated 20-6-2012?...

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CGST (Amendment) Act, 2018- Clarification on Transitional Credit

Circular No. 87/06/2019-GST - (02/01/2019) - The CENVAT credit of service tax paid under section 66B of the Finance Act, 1994 was available as transitional credit under section 140(1) of the CGST Act and that legal position has not changed due to amendment of section 140(1) on account of following reasons:...

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CBEC notifies CENVAT Credit Rules, 2017

Notification No. 20/2017-Central Excise (N.T.) - (30/06/2017) - CENVAT credit. - (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of –(a) the duty of excise specified in the Fourth Schedule to the Excise Act, as leviable under the said Act,...

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Availability of Cenvat Credit on inputs used in the manufacture of capital goods

F.No.267/11/2010-CX8 - (08/07/2010) - I am directed to invite your attention to the landmark judgement of the CESTAT Larger Bench in the case of Vandana Global Ltd. V/s CCE, Raipur [2010-TIOL-624-CESTAT-DEL-LB] delivered on 30.04.10, on admissibility of credit on capital goods and inputs and to state that the Tribunal has ruled that ‘...

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Rule 5 of the Cenvat Credit Rules, 2004 – Refund of Cenvat Credit – Amendment to Notification No. 42/2001-CE (NT), dated 26-6-2001

Circular No. 928/18/2010- Central Excise - (28/06/2010) - It has been brought to the notice of the Board that some of the manufacturers of exempted goods are exporting such goods under bond. Subsequently, they claim refund of accumulated input credit under Rule 5 of the CENVAT Credit Rules, 2004....

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Recent Posts in "cenvat credit"

Certificate of CA or Bank sufficient to establish Linkage between FIRC & Export Invoice

Sentini Technologies Pvt Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad)

The issue under consideration is whether the export proceeds realised even before the invoices were issued are against exported services since FIRCs are also not show the invoice numbers?...

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Department cannot force Assessee to Reverse Credit Merely for non-Intimation made under rule 6 of CCR

Rockey Marketing (Chennai) Pvt. Ltd. Vs Commissioner of Service Tax (CESTAT Chennai)

The issue under consideration is whether department cannot force upon the assessee to reverse credit under Rule 6(3)(i) merely for the reason that no intimation under Rule 6 of CCR?...

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Cenvat Credit Can’t be Denied for Export of Exempted goods Outside India

Eastern Chemofarb Limited (DTA Unit) Vs Commissioner of Central Excise (CESTAT Kolkata)

The issue under consideration is whether the lower authority is correct in stating that the appellant is not entitled to avail credit of duty paid on inputs used in the manufacture of exempted goods since they have cleared the said exempted goods for export outside India?...

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CENVAT credit admissible for construction/setting up of landfill

Maharashtra Enviro Power Ltd. Vs. Commissioner of Central Excise (CESTAT Mumbai)

The issue under consideration is whether denial of CENVAT credit availed by the appellant for construction/setting up of landfill is justified in law?...

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ITC cannot be denied for charge by seller at Higher than specified rate

Visteon Automotive Systems Pvt. Ltd. Vs Deputy Commissioner (CT) (Madras High Court)

The issue under consideration is whether the respondent was justified in directing the petitioner to reverse the input tax credit availed on capital goods in excess of 4% vide the impugned order?...

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Cenvat credit when portion of output service not liable to service tax

Metlife India Insurance Company Limited Vs Commissioner of Central Excise (CESTAT Bangalore)

Metlife India Insurance Company Limited Vs Commissioner of Central Excise (CESTAT Bangalore) CESTAT Bengaluru has held that Cenvat credit of service tax paid under reverse charge mechanism for availing services of insurance agents was available in a case when a portion of the premium amount (consideration towards output service), in case ...

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In a tax neutral exercise, no addition towards unutilized CENVAT credit is warranted

Asta India Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)

whether the CIT (A) is correct in confirming addition u/s 145A of the Act to closing stock for unutilized Cenvat credit in respect of credit inputs or capital goods purchased?...

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CESTAT explains exercise of Option under Cenvat Credit Rule 6(3)(i)

Tata Steel Ltd. Vs CCEx. & S.Tax (CESTAT Kolkata)

The issue under consideration is whether the appellant, Tata Steel, was entitled to avail option under Rule 6(3)(ii) of the Cenvat Credit Rules?...

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Cenvat Credit refund denial for Mere Non-Registration of Premises is unjustified

Commissioner of GST & Central Excise Vs M/s. Pay Pal India Pvt. Ltd. (Madras High Court)

The issue under consideration is whether denial of a refund of Cenvat credit for mere non-registration of Premises is justified in law? learned Tribunal held that refund claimed by the Assessee on Cenvat Credit cannot be disallowed merely because the premises in question was not registered with the Revenue Department....

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No Service Tax on Commission or Agency Fee remitted to entities for handling Vessels outside India

Bharat Petroleum Corporation Ltd. Vs Commissioner of Service Tax (CESTAT Mumbai)

The issue under consideration is whether the commission or agency fee remitted to entities for handling vessels outside India are exempt from service tax as per Section 78 of Finance Act, 1994? ...

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Cenvat Credit of ITC attributable to taxable output & use of Formula

Dell International Services India Pvt. Ltd. Vs C.C.E. & S.T. (CESTAT Bangalore)

The issue under consideration is whether ITC attributable to taxable output included in formula of determining ITC of exempted goods or services?...

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CESTAT warns Commissioner (A) of penal action for not respecting its decision

Park Nonwovens Pvt. Ltd. Vs CCE (CESTAT Chandigarh)

Commissioner (A) has not respected the order of this Tribunal required to be penalized. Therefore, the ld. Commissioner (A) is directed to take care in future to avoid any penal action from this Tribunal....

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SC stays Delhi HC decision in case of Brand Equity -Transitional credit

Union of India Vs Brand Equity Treaties Limited & Ors. (Supreme Court)

Supreme Court has stayed Delhi HC decision in case of Brand Equity Treaties Limited Vs Union Of India which permitted the assessee to file Form Tran-1 on or before June 30, 2020....

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Cenvat Credit cannot be denied for Invoices prior to ISD registration

Mafatlal Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)

Mafatlal Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad) Demand of Rs. 39,60,634/- was confirmed on the ground that same was wrongly availed on ISD invoices issued by the appellant’s Ahmedabad and Mumbai branch for services availed prior to the date of ISD registration was granted for the said unit. ...

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Cenvat Credit on goods purchased but not received is Bogus & not allowable

Exide Industries Ltd. Vs Commissioner of CGST (Bombay High Court)

Goods in question were never received by the assessee in its factory and therefore, the assessee's claim of having consumed the same was not genuine....

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Allow all assessees to claim ITC in GST TRAN-1 by 30.6.2020: Delhi HC

Brand Equity Treaties Limited Vs Union Of India (Delhi High Court)

Rule 117 of CGST Rules is directory in nature, insofar as it prescribes the time-limit for transitioning of credit and therefore, the same would not result in the forfeiture of the rights, in case the credit is not availed within the period prescribed....

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Cenvat Credit not reversible in absence of Physical removal of capital goods

Vodafone Mobile Services Limited Vs CCE&ST (CESTAT Chandigarh)

Cenvat held that appellant is not required to reverse Cenvat credit as the capital goods have not been physically removed from the premises where they were initially installed....

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Refund of Cesses In Cash Not Allowed

1. FACTS OF CASES: 1. M/s Mylan Laboratories Ltd (appellant) is engaged in the manufacture of pharmaceutical and is 100% EOU. The appellant was availing the benefit of CENVAT credit under CENVAT Credit Rules 2004. The appellant filed a refund claim dated 04.01.2018 seeking refund of Rs 28,600/- of its unutilised balance of cesses lying [&...

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Posted Under: Service Tax |

No Cenvat Credit denial for Clerical Error in mentioning Vehicle Number

Cubex Tubings Ltd. Vs Commissioner of Customs, Central Excise Central Excise and Service Tax (CESTAT Hyderabad)

Cubex Tubings Ltd. Vs Commissioner of Customs, Central Excise Central Excise and Service Tax (CESTAT Hyderabad) The issue in dispute is whether the appellant assessee is entitled to CENVAT Credit on the disputed eight invoices or otherwise. It is the case of the Revenue that no material was received by the appellant against these invoices...

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Services rendered by appellant in J&K were exempted services

ECIL Rapiscan Ltd. Vs Commissioner of Central Excise, Customs & Service Tax (CESTAT Hyderabad)

ECIL Rapiscan Ltd. Vs Commissioner of Central Excise (CESTAT Hyderabad) In view of the above, we find that this is a fit case to be remanded to the original authority to re-determine the amount of cenvat credit which needs to be disallowed, the interest thereon and the appropriate penalty as follows: (i) while computing the […]...

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Goods Transport Agency Services not eligible for Cenvat Credit

Hindustan Copper Ltd. Vs C.C.E.& S.T. (CESTAT Mumbai)

The issues involved in this Appeal is whether GTA service is entitle as an input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 even after 1.4.2008 on FOR sales i.e. delivery upto the factory gate of the customers, which, according to Revenue, was beyond the place of removal?...

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Cenvat credit allowable on HR / MS Flats, MS Coils used for manufacturing ships

Commissioner of Central Excise And Service Tax Vs Pipavav Shipyard Limited (Gujarat High Court)

Commissioner of Central Excise And Service Tax Vs Pipavav Shipyard Limited (Gujarat High Court) Conclusion:  Fabrication of various cranes which were embedded to earth could be treated as excisable goods within the meaning of Capital Goods defined in Cenvat Credit Rules, 2004 and the Cenvat Credit availed of Inputs/Capital Goods like HR ...

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S 11B limitation held applicable in accumulated Cenvat credit refund is bad law—Part 2

In the first part of the article, it was evidently clear that the English language cannot do magic to imply limitation to be read in the law (when it is concluded by independent reading of the S 11B that no limitation is specified) merely by way of reference to the Section in the Notification....

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Posted Under: Service Tax |

Refund of input Cenvat credit cannot be denied for mere non-registration of premises

MSYS Tech India Private Limited Vs Commissioner of GST & CE (Appeals-II) (CESTAT Chennai)

High Court of Judicature at Madras has held that the refund of input Cenvat credit cannot be denied just because premises was unregistered, in the case of Commissioner of GST & Central Excise, Chennai Vs. BNP Paribas Sundaram Global Securities, in CMA No. 57 of 2018 dated 18.01.2018. Therefore, the denial of refund for the reasons of a p...

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Cenvat Credit eligible on renting of premises outside factory for marketing

Anand I Power Ltd. Vs Commissioner of Central GST (CESTAT Mumbai)

Anand I Power Ltd. Vs Commissioner of Central GST (CESTAT Mumbai) Renting of immovable property services taken to be used as branch office for procurement of orders, delivery of goods, repair and maintenance service as well as for marketing purpose are admissible credits for both pre and post amendment period covering the entire disputed ...

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Section 43B deduction not allowable for unutilized MODVAT credit: SC

Maruti Suzuki India Ltd. Vs CIT (Supreme Court)

Since unutilized credit in the MODVAT scheme without incurring the liability could not be treated as sum actually paid by assessee under section 43B  hence the unutilized credit under MODVAT scheme did not qualify for a deduction....

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Cenvat credit on maintenance charges for common area of business premises

Mahle Engine Components Pvt. Ltd. Vs CGST, C.E. & S.T. (CESTAT Delhi)

CESTAT Delhi has allowed Cenvat credit on maintenance charges for common area of a business premises taken on rent by assessee. The charges were related to roads, street lights, drainage, etc., provided beyond the manufacturing premises but were charged based on per square meter of business premises occupied....

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Cenvat credit on guest house – HC set aside CESTAT Formula

ACG Associated Capsules P. Ltd. Vs CCE (Bombay High Court)

Bombay High Court has held that rough and ready formula as formulated by CESTAT regarding availability of Cenvat credit on guest houses, that credit was available only on guest houses situated near the manufacturing unit, was not entirely satisfactorily....

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HC stays order related to Transition of Education & Krishi Cess in GST Regime

Assistant commissioner of CGST and Central excise  Vs. M/s Sutherland global services (Madras High Court)

Assistant commissioner of CGST and Central excise  Vs. M/s Sutherland global services (Madras High Court) Madras High Court Division Bench stays order of single judge in Matter relating to transition of education cess, secondary and higher education cess and krishi Kalyan cess into the Gst regime. FULL TEXT OF THE HIGH COURT ORDER /JUDGE...

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S 11B limitation held applicable in accumulated Cenvat credit refund is bad law- Part 1

Local taxes & duties cannot be exported & this is the principle followed the world over under the aegis of the WTO. This basic principle cannot be violated  & if the government does that by implying a limitation period not appearing in the law then it is violation of Basic Principles of Law. It is […]...

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Posted Under: Service Tax |

EOU entitled to Cenvat Credit Refund in respect of goods sold to SEZ units

Mylan Laboratories Limited Vs Commissioner of Central Tax (CESTAT Hyderabad)

Observing that the definition of DTA under SEZ Act includes everything located outside SEZs, CESTAT Hyderabad has held that 100% EOU located outside SEZ, constitutes DTA as far as SEZ Act is concerned. It also observed that Section 51 of the SEZ Act makes it clear that this Act prevails over any other law. The Tribunal held that the appel...

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Distribution of Cenvat credit to other units optional till 2016

Commissioner, Central Tax Vs Oerlikon Balzers Coating India P Ltd. (Bombay High Court)

Bombay High Court has held that it was within the discretion of the assessee whether to utilize Cenvat credit at one of its unit or distribute it amongst other units providing output The High Court however dismissed appeal observing that the entire exercise was revenue neutral as distribution of Cenvat credit to various units would result...

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Cenvat credit on motor vehicles– No need for exclusive use in listed services

Srinivasa Transports Vs Commissioner of Central Tax (CESTAT Hyderabad)

The motor vehicles need not be used exclusively for providing cargo handling or other listed services. The mere fact that they have also used motor vehicles for some other purposes does not deprive them of their CENVAT Credit on motor vehicles....

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Cenvat credit on outdoor catering activity and rent-a-cab services

M/s Mediacom Media India Pvt. Ltd. Vs C.C.G.S.T. (CESTAT Mumbai)

M/s. Mediacom Media India Pvt. Ltd. Vs C.C.G.S.T. (CESTAT Mumbai) Observing that definition of input service was very wide and that the only condition precedent was that it should be the activity relating to business, CESTAT Mumbai has allowed Cenvat credit on outdoor catering services and rent-a-cab services for the period 2007-2010. Rul...

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Drawback on deemed supplies under FTP

In the present policy, the physical exports wherein goods move out of India are eligible for drawback and MEIS benefits. The deemed exports such as removal of goods to advance license holders / EOUs are eligible for duty drawback, refund of terminal excise duty for specified excisable goods and for advance license on annual basis....

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Posted Under: Service Tax |

No denial of Cenvat Credit for mere procedural lapse: CESTAT

M/s D.A. Stuart India Pvt Ltd Vs C.C.G.S.T (CESTAT Mumbai)

M/s D.A. Stuart India Pvt Ltd Vs C.C.G.S.T (CESTAT Mumbai) In the absence of a statutory provision which prescribes that registration is mandatory, the claim of the Appellant cannot be rejected and both the authorities below have committed an error in rejecting the same. In a very recent decision of the Tribunal in the matter of [&hellip...

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Cenvat credit allowable on courier service used for sell of goods

M/s Groz Beckert Asia Pvt Ltd Vs Commissioner of C.E (Cestat Chandigarh)

Appellant is sending the goods through courier and till the goods reach to the buyer’s place, the appellant is the owner of the goods. In case, the buyer refused to take the delivery of the goods, the goods were returned by courier to them. In that circumstance, till the delivery of the goods to the buyer, they are the owner of the good...

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Reversal not required by Restaurants and Outdoor Caterers under Rule 6(3) of Cenvat Credit Rules, 2004

In the past, numerous show cause notices have been issued all over India by Service Tax Authorities to Restaurant Owners and Outdoor Caterers alleging non-reversal of Cenvat Credit under Rule 6(3) of the Cenvat Credit Rules, 2004 by the Restaurants and Outdoor Caterers and demanding Service Tax under Rule 14 of the Service Tax Rules read ...

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Posted Under: Service Tax |

Provisions in Cenvat Credit Rules 2004 regarding reversal of credit

Circular No. 213/3/2019-Service Tax (05/07/2019)

Is reversal under rule 6(3) of the Cenvat Credit Rules 2004 additionally required for all the services specified in notification 26/2012-Service Tax dated 20-6-2012?...

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Cash refund of unutilized credit impermissible on closure of business

M/s. Gauri Plasticulture P. Ltd. vs. Commissioner of Central Excise (Bombay High Court)

The Larger Bench (LB) of Bombay HC rules in favour of Revenue, holds that cash refund u/s 11B of the Central Excise Act, 1944 is not permissible when CENVAT Credit on inputs remains unutilized on account of closure of manufacturing unit or inability to utilize input credit....

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CGST (Amendment) Act, 2018- Clarification on Transitional Credit

Circular No. 87/06/2019-GST (02/01/2019)

The CENVAT credit of service tax paid under section 66B of the Finance Act, 1994 was available as transitional credit under section 140(1) of the CGST Act and that legal position has not changed due to amendment of section 140(1) on account of following reasons:...

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Towers and Shelters are not Immovable Properties: Cenvat Credit allowed

Vodafone Mobile Services Limited Vs Commissioner Of Service Tax (Delhi High Court)

Vodafone Mobile Services Limited Vs Commissioner Of Service Tax (Delhi High Court) Tribunal had denied CENVAT credit to the assessee on the premise that the towers erected result into an immovable property, which is erroneous and contrary to the judgment of the Supreme Court in the case of Solid and Correct Engineering (supra). The towers...

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Cenvat Credit not receivable on Bogus Purchase Transaction

Mangalam Alloys Ltd. Vs Commissioner of Central Excise Ahmedabad-III (Gujarat High Court)

Mangalam Alloys Ltd. Vs Commissioner of Central Excise Ahmedabad-III (Gujarat High Court) The Revenue authorities and the Tribunal concurrently came to the conclusion that the transactions in question were non­existence. The assessee was not able to establish the actual movement of the goods. When the RTO report strongly suggested that t...

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Input credit eligible on welding electrodes used in repair and maintenance of factory machinery

The Ramco Cements Limited Vs CCT (CESTAT Hyderabad)

The Ramco Cements Limited Vs CCT (CESTAT Hyderabad) It is not in dispute that the welding electrodes are used for repair and maintenance of capital goods within the factory of manufacturer and these capital goods are used for manufacture of the final product although the relationship is remote and not direct. So by no stretch of imagin...

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Cenvat Credit eligible on ST paid on product liability insurance / Director Sitting Fees

M/s. Rane Brake Lining Ltd. Vs Commissioner of GST & Central Excise Puducherry (CESTAT Chennai)

M/s. Rane Brake Lining Ltd. Vs Commissioner of GST & Central Excise Puducherry (CESTAT Chennai) The first issue that arises for consideration is whether the appellant is eligible for credit of the service tax (ST) paid on product liability insurance. The department has denied the same on the ground that it is post-manufacturing activi...

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No Cenvat credit admissible on outward transportation services from factory to buyer’s premises

Commissioner of Central Excise & Service Tax Vs. Ultra Tech Cement Limited (Supreme Court)

Whether Goods Transport Agency (GTA) services availed for transportation of goods from place of removal to buyer’s premises will be considered as input service within ambit of Rule 2(l) of Cenvat Credit Rules, 2004?...

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CESTAT on Cenvat Credit on towers, portable shelters and accessories

M/s Vodafone Essar Digilink Ltd. Vs. CCE (CESTAT Chandigarh)

M/s Vodafone Essar Digilink Ltd. Vs. CCE (CESTAT Chandigarh) The appellant is in appeal against the impugned order wherein the cenvat credit on towers, shelters & prefabricated building etc. of Rs. 5,88,13,400/- has been denied. Consequently, the duty was demanded along with interest and equivalent amount of penalty has been imposed. ...

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Credit of ST paid by Commission agents under Excise—Why cheat Assessee?

CBEC: Credit of ST paid on Service provided by Commission agents under Excise—Why cheat the assessee? The government of India has absolute right to levy the taxes therefore it is imperative that the taxation provision should be clearly spelt out so that there is no ambiguity & room for distortion & devious interpretation to put ...

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Posted Under: Service Tax |

Services provided to Facebook, Ireland is Export Service & eligible for cenvat refund

Commissioner of Service Tax Vs. M/s. Gupshup Technology India Pvt. Ltd. (CESTAT Mumbai)

They provide the SMS Aggregator services to M/s Facebook under an agreement for which the bills were raised to M/s Facebook, Ireland and the amount was received in convertible foreign currency. They filed four refund applications towards refund of unutilized cenvat credit of input services used for export of services in terms of Rule 5 of...

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Cenvat Credit on input Services at Job Workers premises

Larsen & Toubro Ltd. Vs CCE (CESTAT Mumbai)

Larsen & Toubro Ltd. Vs CCE (CESTAT Mumbai) This is an appeal has been filed by the appellants against denial of credit of service tax in respect of services provided to their job workers while doing their job work. 2. Ld. Counsel for the appellants argued that they were operating in Rule 4(5) of Cenvat […]...

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Transition of Tax Credits to GST Regime – An overview

With the introduction of GST Regime, a taxpayer is required to carry forward the balance of CENVAT credit / Input Tax Credit (ITC) to GST regime and adjust it against GST liability. Also, vide section 140(3) of Transitional Provisions contained in Central Goods and Services Tax Act, 2017 (CGST Act)...

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Posted Under: Service Tax |

CBEC notifies CENVAT Credit Rules, 2017

Notification No. 20/2017-Central Excise (N.T.) (30/06/2017)

CENVAT credit. - (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of –(a) the duty of excise specified in the Fourth Schedule to the Excise Act, as leviable under the said Act,...

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Goods & Service Tax (GST) transition simplified

As we are nearing to July 1, 2017 GST will be a reality soon. For the transition from existing law to the GST law the government has made the transitional arrangements to carry forward the input tax credit under the existing laws to the GST law....

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Posted Under: Service Tax |

Interest is leviable on credit availed even if not utilised

C.C.E. & S.T., Surat II Vs Shri Rakesh M. Shah (CESTAT Ahmedabad)

Honble Supreme Court and jurisdictional High Courts gave the rulings that reversal of Cenvat credit will amount to not taking Cenvat credit and accordingly benefit of relevant exemption notifications was held to be available to such assessees who reverse Cenvat credit earlier taken. ...

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CENVAT credit on deposits insurance – Banks v/s Departments

Banks are registered under service tax in the category of Banking and Financial Services. They collect and pay service tax on its various incomes such as commissions, bank charges, documentation charges, processing fees etc. levied on its customers....

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Posted Under: Service Tax |

Cenvat Credit cannot be denied for mere non-Registration of Premises

Commissioner, Service Tax Vs M/S Pangea 3 Legal Database Systems Pvt. Ltd. (Allahabad High Court)

Insofar as requirement of registration with department as a condition precedent for claiming Cenvat credit is concerned, there is no provision in Cenvat Credit Rules which impose such restriction. ...

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Limitation period of one year is not applicable for claiming refund of taxes paid under protest

Whether limitation period of one year provided under Section 11B(1) of Excise Act, applicable to Service tax provisions also vide Section 83 of Finance Act, 1994, would be applicable where Service tax has been paid under protest?...

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Posted Under: Service Tax |

Budget 2017-Important Changes in Service Tax

The application fee for seeking advance ruling is to be increased from rupees two thousand five hundred(Rs 2500/-) to rupees ten thousand(Rs.10,000/-) on the lines of the Income Tax Act.( Section 96C(3) of the Finance Act, 1994)...

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Posted Under: Service Tax |

Accounting treatment of CENVAT refund under N/N 187/6/2015

In order to support the survival of exporter of services in international market and for the growth Indian economy, the Central Board of Excise and Custom department has provided the facility of refund of CENVAT credit under rule 5 of CENVAT credit rules, 2004....

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Posted Under: Service Tax |

Download ICAI Technical Guide to CENVAT Credit

Introduction of CENVAT credit rules across goods and services in the year 2004 was one of the major steps in indirect taxes reform process. Since then these rules have undergone significant changes as the Government has addressed issues and difficulties faced by tax payers and also taken steps to reduce cascading of taxes. Union Budget [&...

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Posted Under: Service Tax | ,

Summary of Performance Audit on Cenvat credit scheme.

We observed instances of non-submission of various prescribed returns by the assessees. Non-submission of returns would hinder the department’s ability to verify the duty paid by assessees, correctness of valuation, availing of Cenvat credit, ...

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Posted Under: Service Tax |

Failure to give intimation not restricts Reversal of Proportionate Cenvat Credit

Whether the option to reverse CENVAT credit, under Rule 6(3) (ii) of the CENVAT credit rules, 2004 (CCR) be denied merely on the ground that no intimation was given to the department?...

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Posted Under: Service Tax |

Excise Duty on Inputs cleared after Use or as Waste/Scrap?

Whether Central Excise Duty Payable on Inputs Cleared After Use or as Waste/Scrap? After going through the above title first question comes into mind is how an input can be removed after use or as Waste/Scrap. As per my understanding it is possible in Central Excise Law. Vide Notification No. 13/2016 – CE (NT) dated […]...

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Posted Under: Service Tax |

Changes in CENVAT Credit Rules, 2004 by Union Budget 2016-17

In this article Author has discussed changes in Cenvat Credit Rules, 2004 by Union Budget 2016-17 in Tabular presentation in which he has discussed nature of amendment , Related Rules, Position before the amendment and after amendment and lastly he discussed about the impact of changes....

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Time limit to claim refund under rule 5 of Cenvat Credit Rules, 2004

M/s Infosys Technologies Ltd Vs. Commissioner of Service Tax (CESTAT Bangalore)

The Hon’ble CESTAT, Bangalore held that although there is no specific 'relevant date' under Section 11B of the Excise Act to claim refund of unutilized credit, but, that would not rule out applicability of Section 11B. Relevant date should be the date of export....

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Posted Under: Service Tax |

Imp. changes in Service Tax and Credit Rules w.e.f. April 1, 2016

We are summarizing herewith the changes in Service Tax and Cenvat Credit Rules, 2004 that are effective from April 1, 2016 for easy digest: A: Service Tax leviable under Reverse Charge on any services provided by Government or Local Authority to a Business Entity w.e.f April 1, 2016...

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Exempted services scope for Cenvat credit reversal: Alarming Bell

The Credit Rules has been streamlined with restructuring of Rule 6 of the Credit Rules to make it more cogent. Amendment in definition of ‘inputs’ [Rule 2(k)], to include all Capital goods having value up to Rs. 10,000 per piece, which in turn will enable an assessee to take 100% Cenvat credit immediately,...

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Posted Under: Service Tax |

SEZ developer can claim ST refund on Input services by CA, CS etc

AMRL Hitech City Ltd Vs Commissioner of Central Excise & ST (CESTAT Chennai)

The Appellant is registered as Multi Product Special Economic Zone (MPSEZ) as a developer of AMRL Hi-Tech City. The Appellant claimed the refund of credit paid on various input services under Rule 5 of CENVAT Credit Rules, 2004 (“CC Rules”) read with Notification No. 12/2013-ST dated July 01, 2013....

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Penalty justified for removal of Machinery without CENVAT reversal

M/s Sidmak Laboratories (India) Pvt Limited Vs Commissioners of Central Excise, Customs and Service Tax-DAMAN (CESTAT Ahmedabad)

I find that the appellant shifted the machinery from their registered premises without reversal of the credit. The Central Excise Officers detected the irregularity and thereafter, the appellant reversed the credit....

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Cenvat on bills in HO name despite non registration as ISD

Prince Swr Systems Pvt Limited Vs Commissioners of Central Excise, Customs and Service Tax-VAPI (CESTAT Ahmedabad)

The appellant availed CENVAT credit during the period from June 2009 to March 2010 on the service tax paid on the basis of the invoices issued in the name of their head office. The Learned Advocate submits that the appellant is only manufacturing unit of the head office....

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Cenvat Credit of Service Tax Paid on Freight for Sale on for Basis

Commissioner of Central Excise, Dehradun Vs M/s. Hindustan Zinc Ltd. (CESTAT Delhi)

The Department filed an appeal against the order of the Commissioner (Appeals) and raised the legal issue by submitting that the place of removal is the factory gate and the transportation of the final product manufactured by the assessee beyond the factory gate will not get covered...

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Sales commission Cenvat amendment: Prospective or retrospective?

Assessee and Department have been involved in tug of war on cenvat credit on inputs, input services and capital goods. The assessee attempting to avail credit of every possible input / capital goods /input service by liberally interpreting their definitions and department denying the Cenvat credit by following the principle of literal int...

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Posted Under: Service Tax |

Denial of refund of accumulated CENVAT credit to exporter on post-clearance Services

M/s. Handy Waterbase India (P) Ltd. Vs CCE (CESTAT Chennai)

The taxable services availed by the appellant were to occasion the exports. There appears nexus between export and the service so availed which cannot be ruled out by the authorities below. Once that is present, denial of the refund of the accumulated CENVAT credit to the exporter is unreasonable....

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Cenvat Credit refund cannot be denied when utilisation not possible

M/S. Pallav Textile Ltd. Vs Commissioner Of Central Excise (CESTAT Chennai)

What the learned counsel says is that its right not being abrogated by law and also in absence of any provision in law to deny refund, the unutilised credit of AED is refundable. Following the ratio laid down by the Hon ble High Court of Andhra Pradesh in the aforesaid judgment, appellant is entitled to refund. When law itself does not de...

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More Rationality for higher credit in Rule 6 of Cenvat Credit Rule 2004

Rule -6(1) Rule is amended to provide that CENVAT Credit shall not be available on input used for manufacture of exempted goods and input used for empted services. Rule further direct that procedure for calculation of credit not allowed is stated in sub rule (2) and (3) for different situation....

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Dilemma of Central Excise levy on Readymade garments

The Union Budget/ Finance Bill 2016 has introduced the levy of Central Excise duty on the readymade garments and made up articles of textiles falling under Chapters 61, 62 and 63 (heading Nos. 6301 to 6308) of the Central Excise Tariff except those falling under 6309 and 6310 by withdrawing the exemption available to such goods. ...

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Posted Under: Service Tax |

Amendments In Excise & Cenvat Credit Rules,2004: Budget 2016

E1: INCREASE IN CLEAN ENERGY CESS [NOTIFICATION NO 1& 2/2016 DATED 29TH FEB,2016]- APPLICABLE FROM 1ST MARCH 2016 The Clean Energy Cess is being renamed as Clean Environment Cess. Also, the Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to increase the Scheduled rate of Clean […]...

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Excess Cenvat due to calculation mistake is not wrong availment

M/s. TNT (INDIA) PVT LTD Vs Commissioner of Central Excise and Service Tax (CESTAT Bangalore)

In the case of M/s. TNT (INDIA) PVT LTD Versus Commissioner of Central Excise and Service Tax BANGALORE-III, it was held that where the credit taken was based on the documents where service tax on the input services was paid in excess mainly on account of wrong calculation by the appellant....

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Retrospective Amendment of CENVAT Credit Rules, 2004

Recently, vide the Notification No. 01/2016 - Central Excise (N.T) dated 01 February, 2016 Central Government omitted the proviso to Rule 3, in sub-rule (1), in clause (vii), of the CENVAT Credit Rules, 2004 vide which the importer was entitled to avail CENVAT credit upto a limit of 85% of the CVD paid on the import of ships, boats and ot...

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Availability of Cenvat Credit on inputs used in the manufacture of capital goods

F.No.267/11/2010-CX8 (08/07/2010)

I am directed to invite your attention to the landmark judgement of the CESTAT Larger Bench in the case of Vandana Global Ltd. V/s CCE, Raipur [2010-TIOL-624-CESTAT-DEL-LB] delivered on 30.04.10, on admissibility of credit on capital goods and inputs and to state that the Tribunal has ruled that ‘capital goods’ defined in the CENVAT C...

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Rule 5 of the Cenvat Credit Rules, 2004 – Refund of Cenvat Credit – Amendment to Notification No. 42/2001-CE (NT), dated 26-6-2001

Circular No. 928/18/2010- Central Excise (28/06/2010)

It has been brought to the notice of the Board that some of the manufacturers of exempted goods are exporting such goods under bond. Subsequently, they claim refund of accumulated input credit under Rule 5 of the CENVAT Credit Rules, 2004....

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Clarification regarding availment of CENVAT Credit on input services

Further, section 67(4) of the Finance Act, 1994 provides that the expression “gross amount charged” includes payment made by way of issue of credit! debit notes or by entries in the books of account, where the transaction is with any Associate Enterprise. Considering these provisions, it has now been clarified that in case of services...

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Posted Under: Service Tax |

Reversal of Cenvat Credit in the event of reduction of price after the supply of goods

Bajaj Auto Ltd. Vs. Commissioner of Central Excise

Appellant is engaged in the manufacture of motorcycle, auto rickshaw, etc. and are availing Cenvat credit on the inputs received in its factory. The inputs are supplied by various independent suppliers under contracts backed by the purchase orders for agreed prices. Appellant availed credit on these inputs based on proper duty paying docu...

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Posted Under: Service Tax |

Cenvat credit on common inputs eligible only in terms of rule 6 when excisable & exempted products are manufactured

The Commissioner of Central Excise Vs M/s. Nicholas Piramal (India) Ltd. (Bombay High Court)

Cenvat credit on common inputs eligible only in terms of rule 6 when excisable & exempted products are manufactured. Credit can be availed only in terms of rule 6(3) and reversal of pro rata credit not permissible. Judgment of Chandrapur Magnet distinguished by Hon’ble Bombay High Court....

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Excise duty circular on Irregular availment of Cenvat credit on certain activities not amounting to manufacture

Circular No. 911/01/2010-Central Excise (14/01/2010)

Reference has been received from field formations stating that though certain activities including connectorising, testing, repacking and relabeling of feeder cables, cutting of HR/CR coils into sheets or slitting into strips do not amount to manufacture, such processors are taking Cenvat credit and justifying their Cenvat availment on gr...

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CBEC clarified treatment of Cenvat in respect of goods written off in books

The Central Board of Excise & Customs (CBEC) has clarified the treatment of Central Value Added Tax (Cenvat) Credit in respect of stocks of goods whose value is written off in the books of accounts. It is not unusual that manufacturers are stuck with non-moving stocks of inputs such as raw materials and components, or semi-finished goods ...

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Posted Under: Service Tax |

Interpretation of rule 16 of CENVAT Credit Rules, 2002

When the goods are retuned in the factory in different situations, the assessee is faced with the problem as how to take credit on the returned goods. The problem has been compounded by various trade notices saying different things. Some of the trade notices have prescribed new conditions amounting to the legislation of rules. This paper ...

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Posted Under: Service Tax |

Judicial Accountability for its Judgments

“A company (hereinafter called C) did a Cenvat fraud. A transporter (called T) assisted the company by providing fake Goods Receipts, when actually the goods were never transported. Original authority confirm the demand and imposed a penalty of one crore on the company. Personal penalty of 50 lakhs was imposed on the Managing Director o...

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Posted Under: Service Tax |

Cenvat Credit on Exempted Job Work

A job worker is engaged in processing material, supplied by principal manufacturers on job work basis. Such job work is covered under Business auxiliary service attracting service tax, when the process does not amount to manufacture. However, Notification 8/2005-S.T. dated 01.03.2005 exempt such job work on the condition that the processe...

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Posted Under: Service Tax |

Interest on irregular Cenvat taken or utilized

“Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for...

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Posted Under: Service Tax |

Amendment for Cenvat on Building Material : Far from solutions

In a manufacturing process, there are a lot of raw materials used to make a final product. The excise duty paid on the said raw materials or inputs used in manufacturing of final products are eligible as Cenvat credit under the Cenvat credit scheme. However, all materials used in a manufacturing process are not inputs […]...

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Posted Under: Service Tax |

Changes in Excise Duty Rates in Union Budget 2009

However, the said goods would be exempt from excise duty subject to non availment of Cenvat credit on input. [Notification No 30/2004-CE refers]. Thus, the exemption will be optional. Those opting to pay duty @ 4% will be eligible to avail Cenvat credit. The applicable rates for CVD purposes will be 4%....

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Posted Under: Service Tax |

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