Excise Duty : By virtue of powers granted under Section 37(1) of Central Excise Act, 1944, Central Government can make rules to provide for cre...
Service Tax : Off late many assessees faced the wrath of the Department by way of Show Cause Notices, spot recoveries and personal penalties owi...
Service Tax : Input service is defined in Rule 2(l) of Cenvat Credit Rules, 2004 as service used by the manufacturer or service provider. Wherev...
By virtue of powers granted under Section 37(1) of Central Excise Act, 1944, Central Government can make rules to provide for credit of Service Tax leviable under Chapter V of the Finance Act, 1994 (32 of 1994) paid or payable on taxable services used in or in relation to the manufacture of excisable goods.
Off late many assessees faced the wrath of the Department by way of Show Cause Notices, spot recoveries and personal penalties owing to the alleged failure to take reasonable care while taking Cenvat credit. If the default of duty or tax payment is necessitated either due to genuine reasons or conscious evasion, the assessees at the receiving end are subject to harassment and intimidation by imposing all penal provisions in the Act and Rules. Even now, undue hardship is caused to assessees during Audit and also while processing refund claims, especially of Service Tax, due to the insistence of the officials to produce proof of payment of tax by the manufacturer or service provider for allowing credit or for granting refund.
Input service is defined in Rule 2(l) of Cenvat Credit Rules, 2004 as service used by the manufacturer or service provider. Wherever the word “input service’ appears in Cenvat Credit Rules, it would connote the meaning as input service used. Being so, Service Tax on advances, inasmuch as it relates to a service provided and not used by the manufacturer or service provider , availment of such credit poses problem and is prone to litigation.
