CAPITAL GOODS SEIZED BY FINANCE COMPANY-CENVAT CREDIT

[MANDAVILLI RAMAKRISHNA]

Dear Experts,

My client ( A )  purchased    stone crusher and installed by taking cenvat invoice from

the manufacturer ( B ) . but before starting production, the finance co. ( C ) seized the machinery and sold to third party ( D ) who in turn given the machinery

on rent basis to fourth party ( E ) Please advise who is eligible to take credit of the cenvat paid and against which documents and whether the D can set off his service tax liability for renting the tangible goods to E.

Kindly advise with deep concern as the  A party is in severe financial crunch and the tax bore by him if get back as refund it will be greatest help to him.

Regards

RK

 

AI Summary

Stone Crusher CENVAT Credit Eligibility: Financing Impact and Service Tax Offset for Third Party Rentals A client purchased a stone crusher using a CENVAT invoice, but the finance company seized and sold it to a third party before production began. The third party rented it to another party. The query seeks advice on who can claim CENVAT credit and whether the third party can offset service tax liability from renting the equipment. The response indicates that eligibility for credit depends on whether the stone crusher was financed or used as collateral. Additionally, the third party may not receive input service credit without a proper excise invoice from a registered dealer.