Cenvat Credit Rule9(6)

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Alok Kumar Murarka (Querist)
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20 May 2011 Whether Cenvat credit can be disallowed if Service Provider on whose invoice we have taken credit, does not remitt the tax to government treasury.

As per Rule 9(6) of Cenvat Credit Rules, 2004, "the manufacturer of final products or the provider of output service shall maintain proper records for the receipt and consumption of the input services in which the relevant information regarding the value, tax paid, CENVAT credit taken and utilized, the person from whom the input service has been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall be upon the manufacturer or provider of output service taking such credit."

please advise and mention case laws if any.

U S Sharma

U S Sharma (Expert)
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20 May 2011 its on good deed that the seller would pay taxes, but if found that the seller has not remitted taxes then buyer would have to reverse the same, i.e input credit would not be available on such bills on which duty has not been remitted.

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Alok Kumar Murarka

Alok Kumar Murarka (Querist)
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20 May 2011 Thanks for your reply, on going trough the Cenvat Credit Rule-9(6), it is no where mentioned that buyer is responsible for ensuring that seller has remitted the tax. it only says that buyer has to maintain proper record for receipt and consumption and the person from whom it is procured and admissibilty of cenvat credit.

then on which basis they can disallow the credit.

U S Sharma

U S Sharma (Expert)
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20 May 2011 if The seller has not not discharged the liability then the document itself has been cancelled.

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