TaxTMI 
TaxTMI 
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.
availing cenvat credit-reg
28 Jan 2017 
11 Replies 
2120 Views Asked by
Guest 
Cenvat credit admissibility: payment after show cause notice may be barred for fraud; documentary proof and challan rules control.
Admissibility of Cenvat credit after payment post show cause notice turns on whether fraud or suppression is alleged; if so, credit is disallowed and amounts may be transferred to consumer welfare. Classification and documentary proof (purchase invoices, VAT payment evidence) determine entitlement to Works Contract Service benefits and reverse charge/abatement; burden of proof is on the claimant. Where service is treated as pure labour and full rate tax paid, credit may be taken on valid tax challans (subject to age limits), but suppression or supplementary invoices can bar credit. (AI Summary)
Admissibility of Cenvat credit after payment post show cause notice turns on whether fraud or suppression is alleged; if so, credit is disallowed and amounts may be transferred to consumer welfare. Classification and documentary proof (purchase invoices, VAT payment evidence) determine entitlement to Works Contract Service benefits and reverse charge/abatement; burden of proof is on the claimant. Where service is treated as pure labour and full rate tax paid, credit may be taken on valid tax challans (subject to age limits), but suppression or supplementary invoices can bar credit. (AI Summary)