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CENVAT CREDIT

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Court :
CESTAT, NEW DELHI BENCH

Brief :
Rule 3 of the Cenvat Credit Rules, 2004, read with section 68 of the Finance Act, 1994 - Cenvat credit - Allowance of - Whether as per Cenvat Credit Rules and CBEC excise manual of supplementary instructions, there is no restriction for utilization of Cenvat credit by a manufacturing unit towards payment of service tax as service tax provider - Held, yes [Para 4] >> Facts The assessee was a manufacturer and output service provider. The Commissioner (Appeals) held that it was entitled to Cenvat credit of manufacturing activity for the utilization of the same towards the payment of service tax. The revenue challenged the order of the Commissioner (Appeals) on the ground that Cenvat credit of manufacturing amount could not be used for discharging service tax liability on deemed service provider. >> Held As per the Cenvat Credit Rules, output service means any taxable service provided by the provider of service to a customer, client or any other person and the provider of taxable service include a person liable for paying service tax. Further, as per CBEC Excise Manual of supplementary instructions, certain restrictions were imposed for the payment of Cenvat credit. [Para 3] As per the Cenvat Credit Rules and as per the manual there is no restriction for the utilization of Cenvat credit by the manufacturing unit towards payment of service tax as service tax provider. Therefore, there was no infirmity in the impugned order and the appeal was to be dismissed. [Para 4]

Citation :
Commissioner of Central Excise, Chandigarh v. Nahar Industrial Enterprises Ltd.

As per the Cenvat Credit Rules and as per the manual there is no restriction for the utilization of Cenvat credit by the manufacturing unit towards payment of service tax as service tax provider. Therefore, there was no infirmity in the impugned order and the appeal was to be dismissed. [Para 4]
 

Ravikumar.G
on 18 September 2007
Published in Service Tax
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