is service tax credit allowed for lease rent of capital goods i.e. machinery

[manish kumar]

An assessee has taken credit of Lease rent of Machinery.from A company. They also job work for A company & take input credit for all inputs. They sell all the goods by the payment of excise duty. Can we allow Cenvat Credit for Such case.

[Himansu Sekhar]

If the question can be redrafted in this fashion:

B Company carry job work for Company 'A'

'A' provided machines on lease to 'B' and raise s.tax bills on 'B'

'B' procures inputs for the job work on payment of CEX duty

'B' after doing the job work cleares the goods on payment of CE duty as per the instruction of 'A'

If the above statements match , then the availment of credit by 'B; is proper and legal.

[Ganeshan Kalyani]

In my view, input tax credit is eligible.

[DR.MARIAPPAN GOVINDARAJAN]

I endorsed the views of both the experts.

[manish kumar]

Thanks sir.

[Ganeshan Kalyani]

Welcome Sir.

AI Summary

Cenvat credit eligibility for leased machinery: lessee performing job work may avail input credit where excise duty paid on inputs.
Whether Cenvat credit is admissible on lease rent for capital goods where a lessee performs job work using leased machinery, receives service tax invoices from the lessor, procures inputs on payment of excise duty and clears finished goods on payment of excise duty; practitioners conclude that availment of credit by the lessee is proper and permissible, subject to compliance with Cenvat rules and documentary invoice evidence.