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TMI Blogavailing cenvat credit-regX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, Can cenvat credit be taken on payment of tax for past clearance if show cause notice is issued if the amount is paid before contesting the scn. If possible, kindly give reasons in either case to satisfy the deptt. - Reply By YAGAY AND SUN - The Reply = Dear Sir, In the recent past CBEC had issued a Circular in this regard, please check that Circular. Further, if the SCN had been iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by alleging fraud, mis statment by extending the five years then the amount so collected will be transferred to consumer welfare account and no CENVAT credit would be allowed. - Reply By Ganeshan Kalyani - The Reply = In my view credit can be taken. In one of my practical experience i have observed. - Reply By YAGAY AND SUN - The Reply = If the amount is paid before contesting the SCN eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n then you would have to pay interest and 25% penalty within 30 days of issuance of SCN. Further, No CENVAT credit is allowed. It is settled legal position. You may also check it from the jurisdictional commissioner office. Further, it SCN is adjudicated in favour of Assessee then either refund is required to obtained or if SCN is adjudicated along with consequential relief then no need to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the refund claim. - Reply By KASTURI SETHI - The Reply = Sh.Prasad Ji, Pl. elaborate your query with full facts of the case for clearing your doubt. - Reply By YAGAY AND SUN - The Reply = Yes Sir, if possible please share with us material facts of your matter enabling us to revert. - Reply By jagannath prasad - The Reply = Shri Kasturiji, Thanks for your response. The matter in detail as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below:- During audit in 2015 it was found that a builder had made certain payments to various contractors as per their balance sheet.The audit, without any investigation,took stand in the audit memo that since this was a Works Contract the builder should pay S.T. under reverse charge.The builder initially showed their ignorance but later succumbed under departmental pressure and paid tax of mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than 20 lakhs under the impression that matter would end then. But later on the matter was referred to preventive for investigation at the contractor's end who were all builder's men.In the mean time the contractors also paid their liability under RCM. Since the contractors were not registered under VAT nor any written contract was entered nor the contractors had kept material purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices, the department has not treated the service as works contract service and has issued notice demanding tax at full rate.The contractors want to pay tax to avoid litigation, if the builder gets benefit of CENVAT Credit. Is it possible under the law and if not, what may be the other alternatives beneficial for the contractors. With regards, - Reply By Ganeshan Kalyani - The Reply = If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is collected at one point of transaction then it should not be demanded at the second point. - Reply By KASTURI SETHI - The Reply = Sh.Jagannath Prasad Ji, In the absence of purchase bills of material and in the absence of the proof of payment of VAT, SP is not eligible for Works Contract Service. In terms of Notification no. 24/12-ST dated 20.6.12 , proof of payment of VAT is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine service portion of WCS. Hence the SP is not entitled to the benefits of RCM and Service Portion under Notification No.30/12-ST and 24/12-ST respectively. Other factor regarding service should be provided to business entity (body corporate) is also to be examined . In my view the department is legally right to the core. Burden of proof is cast upon the person who claims b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit under any notification.. - Reply By jagannath prasad - The Reply = Thank you sir, In that case, the SP has to pay tax at full rate. Now since SCN has been issued,will the SR be able to avail cenvat if SP pays the tax now OR if there is some other way out in your esteemed opinion. - Reply By KASTURI SETHI - The Reply = Dear Sir, Now the party i.e. contractor is out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WCS. The department has considered the contractor's as pure labour and ST at full rate has been paid. So this service is under erstwhile BAS or now under Other Than Negative List . Credit is admissible on the strength of challan and it should not be more than one year old.There is no hurdle in availing Cenvat Credit. There is no 'buts and ifs' of WCS as this is pure labour. By deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding ST at full rate without giving benefits of RCM and abatement, the department has brought this service out of WCS or any construction service. This is my opinion. - Reply By Himansu Sha - The Reply = I have a view. If the supplementary invoice is issued by way of suppression etc., the bar isd there for taking credit. But I think the provisionis not applicable when the document under rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 is a challah. - availing cenvat credit-reg - Query Started By: - jagannath prasad Dated:- 28-1-2017 Service Tax - Got 11 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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