COMMON SERVICE

[SURYAKANT MITHBAVKAR]

Under Excise Law We have manufacturing unit at Vasai registered with Excise and SERVICE tax. We have rented one more unit at Mumbai wherein we have started manufacturing activities under same name and taken excise and service registration as branch of Vasai unit. We have declared as Admin And registered office of the whole factory i.e. Vasai and Mumbai in the rented place.

In rented place the owner of the property is also registered under SERVICE tax act and he was issued SERVICE tax invoice for rent received. Since we have manufacturing activity at the rented place we have availed service tax credit against rent .

Now excise department conducted Audit EA 2000 for our rented place and observed that rent is common service since we have operating admin and registered office for Vasai unit and We have to reverse the credit availed against rent.

We have explain them that we have occupied 90% place for our manufacturing activities and 10% for office for the both places i.e. Vasai and Mumbai. They are not satisfied.

Please comment expert advise for the same issue

AI Summary

Cenvat credit on rented premises upheld where premises predominantly used for manufacturing; reverse proportionate credit if no evidence.
Cenvat credit on rent is allowable where the leased premises are predominantly used for manufacturing, but entitlement hinges on documentary proof of the usage ratio; lacking such evidence, the taxpayer should reverse proportionate credit attributable to exempt administrative use, with apportionment certified by a chartered accountant or cost accountant to obtain legal backing.