Cenvat credit on exempted and non exempted

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If a company is providing service for which it uses heavy machinery and pays excise duty on capital items purchased. Also few of the clients are service tax exempt and few of the clients pay service tax, but for both the type of clients same machinery is used. How can we claim the cenvat benefit in this case.

AI Summary

Company Can Claim 100% Cenvat Credit on Capital Goods for Mixed Services: 50% First Year, Rest Later A company using heavy machinery for services, some of which are exempt from service tax, inquires about claiming Cenvat credit. The first response clarifies that if capital goods are used for both exempt and non-exempt services, the company can avail 100% Cenvat credit: 50% in the first year and the remaining in subsequent years. The second response confirms that credit is available even when services are provided to exempt clients, noting that exemptions typically apply to SEZs and certain construction services for non-profit organizations.