Cenvat credit availment

They can not avail the cenvat credit on capital goods purchased which is used for exempted service

As per the provisions of Cenvat Credit Rules, 2004, Cenvat credit on Capital goods is not admissible of the same are used exclusively in in providing exempted services

Rule 6(4) of Cenvat Credit Rules, 2004 -

No CENVAT credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year.