Utilization of credit on input services for payment of excise duty

[chaganti srinivas]

Dear Sirs, Dept. denied credit availed on input services for the reason saying that this credit was utilised for payment of our output Service Tax. Please let me know is there any circular / notification restricting utilisation of credit only to payment of central excise duties and pay the service tax payment thru cash?, Please refer case laws if any. Thanks & regards srinivas

[Brijesh Verma]

Cenvat Credit is simply your account in government books. Except a few restrictions such as utilization of credit of NCCD, ACD or cesses, there are no restriction in inter-adjustments of excise and service tax. On the basis of the limited information which I could gather from your query, in my opinion, you can very well utilize Service Tax Credit for payment of Excise Duty as well as vice-versa.

AI Summary

Cenvat credit permitted to be inter-adjusted; service tax credit may be used to pay excise duty.
Cenvat credit on input services may be applied across excise and service tax liabilities as an account in government books; routine inter-adjustment between service tax credit and excise duty is permissible except where specific restrictions apply to certain cesses or duties, which remain non-transferable.