Cenvat Credit of Service Tax Paid

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siva (Querist)
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02 February 2008 Sir,
Iam working in a Coal Mining Company which is paying Stowing excise Duty on all its Coal Dispatches @Rs.10 per tonne.The Levy of this Duty was covered under Sec.6 of Coal Mines(Conservation and Devolopment)Act,1974.We are also paying Service Tax on input sevices used for the extraction of Coal.

Can we take Cenvat Credit of Service Tax paid on input services and utilize such credit for payment of Stowing Excise Duty paid on output?

Kindly provide clarification .
ThankYou.

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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02 February 2008 as per excies and service tax act you will claim cenvat credit on input service but we dont know whether coal mine charges are mandatory or not you will conformed from the respective department

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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siva

siva (Querist)
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06 February 2008 Thanks for your reply. Sir, as per Sec.4 of Coal mines(Conservation and Development)Act 1974, it is mandatory to pay Stowing Excise Duty on all coal Dispatches.The Coal Controller will be the administrative incharge to look after all these collections.
As per CENVAT Credit Rules,2004, the credit can be utilized towards payment of any type of Excise Duty. But my doubt is wether the above said Stowing Excise Duty will comes under above or not.

siva

siva (Querist)
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08 February 2008 Can anybody working in coal companies provide information on the above

Dayal

Dayal (Expert)
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13 February 2008 Stowing Excise duty is not specified as a duty of Excise,Similary there is State Excise Duty which is also not a notified central excise duty.

Therefore you cannot claim cenvat credit of service tax unless you have taxable output service.

This means you cannot utilise the input credit against stowing excise duty.

AVAILABILITY OF CENVAT CREDIT
A manufacturer or producer of Finished Product or a provider of taxable service shall be allowed to take credit called as Cenvat Credit of the fllowing :
1. Cenvat
2. Special Excise Duty
3. Additional Excise Duty (Textiles & Textile
4. Additional Excise Duty (Goods of Special Importance
National Calamity Contingent Duty
6. Education Cess on above
7. Additional Custom Duty = Excise Duty
8. additional duty leviable under Section 3(5) of the Custom Tariff Act.
9. Service Tax
10. additional duty of excise leviable under section 157 of the Finance Act 2003
11. Education Cess on Service Tax
12. Additional duty of excise leviable on paan masala

UTILISATION OF CENVAT CREDIT
Cenvat credit may be utilised for the payment of the following :
1. Any duty of excise paid on any final product
2. Duty on input removed as such or after being partial processed.
3. Duty equal to cenvat credit when capital good is removed as such
4. Duty under central Excise Rule 16 (2) relating to final product received back, repaired and removed
5. Service tax on output services

This is absorbed from the act and interpreted in the spirit of the law for adherance.

You may kindly evaluate your position in light of the above

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