Disallowed the service tax credit

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Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2015 Dear Sir ,

Q for all Experts ?

Sir , Service tax liability against Mar-14 on GTA & Manpower Service we had paid against GAR-7 on 31st march but we had not Credit /Utilized in Excise ER-1 return on Mar-14 ,same we had credit/utilized on April-14 .
Now excise department raise the Question and disallowed form April-14 refund order as per refer Notification No.20/2007-CE dated 25.04.2007
Please suggest what should we do ?

Thanks in Advance

Digjoy Purkayastha

Rajesh Kumar

Rajesh Kumar (Expert)

13 September 2015 You need to utilize all Cenvat Credit in a particular month. However if the credit was not taken in the month of March, there is no question of utilizing it in the month of March. The disallowance of refund of illegal. You need to file appeal before Commissioner (Appeals).

Querist : Anonymous

Querist : Anonymous (Querist)

14 September 2015 Thanks sir ,

But Department said as per notification No-20/2007-CE dated-25.04.2007 it is not allowed to take because march payment you can adjusted on march otherwise it is disallowed

Kindly confirm it's correct as per rule

Rajesh Kumar

Rajesh Kumar (Expert)

14 September 2015 In the earlier notification 32/1999, it was provided that Cenvat Credit should be utilized in toto before making payment from PLA... in any case you can utilize only that credit which you have taken. As you didnt take credit in March, you cannot utilize it.
Further you took credit in April, which is perfectly legal as you can take credit anyday after goods are received in factory. It is not necessary that credit should be taken immediately on receipt of goods. Anyway, consult your lawyer and file appeal.
Why are you not availing the option of self credit?

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