cenvat credit on service tax for installation of machinery in manufacturing of excisable as well as exempted product

[Mehul Pandya]

Sir,

We are manufacturing excisable as well exempted product. We have received one service invoice for the errection, commssioning and installation of capital goods including value of that capital goods. Hence my query is that can we avail cenvat credit for the same .?? Is there any notification or else in supporting of the same because cenvat volume is too high. Pl. advice me.

Thank you

AI Summary

Manufacturer Seeks CENVAT Credit for Machinery Installation; Experts Discuss Rule 6 Options and Accounting Implications. A manufacturer inquires about availing CENVAT credit for service tax on the installation of machinery used for both excisable and exempted products. A consultant advises that CENVAT credit is available as long as the machinery is not exclusively used for exempted goods, referencing the CENVAT Credit Rules, 2004. Another expert outlines options under Rule 6, including paying a percentage of the value of exempted goods or maintaining separate accounts. Additionally, it is suggested that installation costs should be capitalized, not treated as revenue expenses, and the applicability of Rule 6 should be reconsidered in light of accounting standards.