Availment of Cenvat credit of additional duty on capital goods

[sunil mehta]

Rule 3(1) (viia) of CCR, 2004, permits a mfg. or producer or a provider of taxable service to take credit of -' the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, '-as capital Goods C.Credit. Provided that a provider of taxable service shall not be eligible to take credit of such additional duty; But Explanation to Rule 3(1) says that ..'.- For the removal of doubts it is clarified that the manufacturer of the final products and the provider of output service shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act on goods falling under heading 9801 of the First Schedule to the Customs Tariff Act. Query:-1)Whether a service provider(under mining services) can avail capital goods cenvat credit of 'addln. duty of customs ,if he imports the machinery and uses it for limestone extraction in a cement factory on contract basis?

AI Summary

Can Service Providers in Mining Avail Cenvat Credit for Machinery Import Under Rule 3(1)(viia) Without Using for Service Tax? A discussion on the availment of Cenvat credit of additional duty on capital goods under Rule 3(1)(viia) of the Cenvat Credit Rules, 2004, highlights that manufacturers and service providers can take credit for additional duty under section 3(5) of the Customs Tariff Act. However, a service provider cannot use this credit to pay service tax. The query specifically asks if a service provider in mining services can avail of this credit when importing machinery for limestone extraction. The response clarifies that while credit can be availed, it cannot be used for service tax payments, raising questions about its utility for service providers.