credit of service tax

[rutvij vyas]

my client is purchasing coal from coal company then after to wash coal it has been sent to washery. now washery will wash the coal which is perfact and will not wash rejected coal. now my question is whether my client will get credit of service tax on rejected coal ? let me clarify this by example that if coal company provides 100 ton coal to washery then washery will first wash 100 ton then after finding out 20 ton is rejected coal so whether it has to issue bill of 80 ton and charged service tax accordingly or should raise invoice stating 100 ton wash coal less 20 ton rejected and thenafter bill of 80 ton ? please guide me on urgent basis

AI Summary

Service Tax Credit Applicable on Total Coal Processed, Including Rejected Quantity, Under Rule 6 of Cenvat Credit Rules 2004. A client purchasing coal sends it to a washery for cleaning, where some coal is rejected. The client inquires if service tax credit applies to the rejected coal. An expert suggests billing for the entire 100 tonnes processed, as the washing service covers the full amount, allowing for Cenvat credit on the total. Another expert agrees, questioning if washing charges apply to rejected coal. If so, tax is levied on the full amount, making Cenvat credit applicable to the entire quantity. The discussion references Rule 6 of the Cenvat Credit Rules, 2004.