Cenvat credit on man power supply service during non payment

Dear Sir,

We are small scale manufacturere, paying duty afater crossing 1.5 crores of Assesable value.

we had accumulated input service tax credit for man power supply from our cntractors from april 2015 to Dec 2015( Non duty payment period) to the tune of 3 ,65,000/-we had taken this amount into our excise duty debit for the last quarter of Jan 16 to March 16 (duty paying months)  which is being objected by the Department.

The Department claims that we are not eligible to take input service tax credit for non duty paying period.They asks us to revert back amount with interest.

Pl clarify this matter and oblige.

Thanking you,

For Pamarox Pvt Ltd,

M.K Hameed Sultan

Director.

email : pamarox @ gmail.com

Replies (1)

Cenvat Credit Rules- read with SSI Not : When you have used the service for manufacturing goods under exemption, you would not be allowed the credit. Matching principle if you can use the term.

Once you start payment of ED then input tax credit can be availed. 

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