Cenvat Credit on Parts Purchased

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2010 One Automobile Dealer has purchased spares parts and paid excise duty on parts purchased

same automobile dealer providing vehicle servicing washing, repairs and maintenance service and they are paying service tax on same

do they claim excise input credit on the basis of parts used during the servicing of vehicle ( not on bulk purchase basis)
and credit of excise input(cenvat) can use on the payment of service tax?

if yes please refer section number/ case law reference/ any other reference

please explain with references

Thanks in advance to solve that problem

Rajesh Kumar

Rajesh Kumar (Expert)

02 December 2010 Generally, service station bills value of parts and labour separately, and pay Service Tax on labour part only. In that case credit of excise duty paid in parts is not available for credit.
If the value of parts is included i the value of services on which service tax is being paid, credit of excise duty paid on parts shall be available as cenvat credit.

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