cenvat rule 6(3A) procedure lapse

[satbir singhwahi]

During audit by Service tax dept , the procedure lapse of non intimation to dept. has been detected. Whether proportionate cenvat can be allowed after reversal of cenvat on exempted services.Dept . insisting for full cenvat disallowance.

AI Summary

Service Tax Audit Query: Addressing CENVAT Credit Lapse, Rule 6(3) Options, and Potential Penalties for Non-Compliance. An individual raised a query regarding a procedural lapse detected during a service tax audit, specifically the failure to notify the department about CENVAT credit on exempted services. The department insists on full disallowance of CENVAT credit. A respondent suggested exercising the option under Rule 6(3), providing intimation details as per Rule 6(3A), and seeking condonation for the delay. They advised reversing the credit proportionately and paying interest. Another participant mentioned potential penalties due to ignorance of law, while others discussed relevant case law and the possibility of the department issuing a show cause notice.