CENVAT Credit on Legal services

[Binu Karuthedath]

Dear Experts

On of the Excisable manufacturer have paid legal service charges for Frame work of Brand Sale agreement and they have paid Service Tax under reverse charge system and allready taken CENVAT Credit for payment of Excise Duty.But Department has been objected to take CENVAT Credit on legal services. Their aragment is it is nor related to manufacturing and not eligible for CENVAT credit. Kindly clarify

AI Summary

Cenvat credit on legal services available when used in relation to manufacture, subject to correct invoicing and allocation.
Legal services are listed as an input service under rule 2(l) of the Cenvat Credit Rules, 2004 and service tax paid on legal consultancy is generally eligible as CENVAT credit when used by a manufacturer in or in relation to manufacture and clearance; however, direct credit can be restricted by invoicing particulars-if the invoice is raised to head office the credit should be distributed by the head office and taken by the manufacturing unit only as allocated.