Dear Experts,
As per Rule 4(7) of Cenvat Credit Rules , 2004 Service tax credit can be avalied only after payment of value of input service and the service tax payable on it.
Now Query is : -
Company A procures raw material from Company C and sends the material for Job Work to Company B (Job Worker), Due to some business requirements Company A asks Company C to deliver the material Directly to Company B (to the Job worker).
After the above transction, Company B (the Job worker) raises bill for job work charges. And Company A while making payment to the Company B (job worker ) pays 50 % in CASH and Balance 50 %, it adjusts against the material directly supplied by Company C. Whether this book adjustment (payment by way of book adjustment) will amount to payment made as per Rule 4 (7).
If yes, some body can please through light on this issue. supported by some judgements etc.
Regards
Sameer
CAclubindia
