availment of cenvat

This query is : Resolved

rap (Querist)
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14 August 2009 The Company is having two production units located in two different places- A & B.

Production in Unit B is closed/stopped from 2005-06 but all establishment expenditure, repairs and maintenance is still continued and machineries are blank run so as to avoid rusting and damages to the equipemets.

Production at unit A is still going on.

The Company at Unit A is taking cenvat credit for Excise duty /service tax paid for input raw materials /services.

Now the doubt is whether unit B can avail cenvat credit on ED/Service tax paid relating to Unit B

Because the unit B is paying ED/service tax relating to their unit but is not availing cenvat credit.
production in Unit B is closed based on supreme court orders as it affects environment. However the staff related expenditure and plant and machinery maintenance is still continued where in it is paying ED/ST also.

What is the best available solution to take cenvat credit for the above payments made by unit B.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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17 August 2009 ED credit may not be admissible unless some part of the activity undertaken at B. Input service tax credit is available if the Input Service Distributor registration is applied for and claimed.

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