Cenvat credit on ser tax 2 units - reg

[venkat eswaran]

Dear all

We have two units one is in own premises and Main unit another is leased premises and second unit.

For leased unit-2 we are paying lease chrgs for land and machineries. That service tax credit we availing in unit-1 since bill is in the unit-1 (Main) address and pmt is made from unit-1 only.

Now the Excise audit has come in unit-1 and disallowed that service tax on lease chrges and they said we have to take credit in unit-2 only not in unit-1 asked to reverse the credit with interest.

What the audtitors said is ok? There is no revenue loss to government. unit -2 is separate range and division.

Auditors also said u can pay the the total ser tax whatever availed in unit-1 and take credit in unit-2 now.

Unfortunately we have closed that unit-2 three months back and shifted to other place that is another range. So we cannot take credit in unit-2 now that RC surrendered already

What we can do for this? Whether audit point is ok or we can contest this?

Please give your expert suggestions on this

Thanks in advance

Venkat

AI Summary

Company Faces Cenvat Credit Issue on Lease Charges; Experts Agree Credit Likely Lost Due to Closed Unit A company with two units, one owned and the other leased, is facing an issue with Cenvat credit on service tax for lease charges. The credit was taken in the main unit's account, but auditors have disallowed it, insisting it should be claimed by the leased unit. However, the leased unit has been closed, complicating the reversal of credit. Experts in the forum generally agree with the auditors' stance, suggesting that the credit cannot be contested and is likely lost. Some recommend fighting for a refund if the amount is significant, while others suggest accepting the loss if minor.