Service tax credit on - Capital goods service

[Guest]

We have manufacturer under SSI. We bought machinery from Excise Manufactuer and taken 50% cenvat on it in this year & will take 50% in next year. The manufactuer charged to us service tax on machine erection. Can we avail Cenvat of service tax 100% or 50% in this year & 50% in next year? Please suggest with notification or rule no. Regards. AYAJ

AI Summary

Small Scale Industry seeks clarity on claiming CENVAT credit for machinery erection services under Rule 2(l) of CENVAT rules. A manufacturer under the Small Scale Industry (SSI) category inquired about availing CENVAT credit on service tax paid for machinery erection. They had already claimed 50% CENVAT on machinery and planned to claim the remaining 50% next year. One respondent advised that 100% credit could be claimed in the first year since erection services qualify as 'Input Services' under Rule 2(l). Another respondent questioned the applicability of CENVAT credit if the entity is not an excisable unit, implying potential ineligibility for the credit.