Cenvat on capital goods

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This query is : Resolved

SHAMBA PEDNEKAR (Querist)

16 November 2011 A unit was providing services & partially manufactures goods.Service tax being paid & for manufactured goods SSI exemption were availed being sales below Rs.1crore. During the year 2006 uint have availed CENVAT credit on Capital goods & the same being used for payment of services(75% padi in cash & 25% utilised from CENVAT on capital goods).The balance to the Cenvat credit was Rs.250000/- as on 31.3.2009 remained unutilised as we stop rendering services.In 2010 we have started paying excise duty on manufactured & utilised this credit available in Service Tax records, transfering the same in excise records. Is this permitted. Excise people saying to reverse this amount as this credit was availed in Service Tax records & you can use only for services & not for manufactured goods.

U S Sharma

U S Sharma (Expert)

16 November 2011 as you have availed the capital goods credit under service tax return, department is right in their stand, you had to show the debit from service tax return itself, not from excise.

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