CENVAT CREDIT TAKEN ON SERVICE PROVIDE OUT SIDE

[SNEHAL SHAH]

Sir,

We have excise registration and Service tax registration & our product is enginering related product . So we are Manufacturing product and errected at Customer site through contract services .

Now problem is that contractor raised bill with service tax & we have awailed cenvat credit on this but in audit objection is that this errection activity is not your inside production premises so all service tax disallow and raised point & revesed with interest .

We had already pay service tax on errection servie provide to customer on Amount received from custiomer as a errection and commissioning charges , so please gude on which poing auditoer dissallow this .

Advance thanks .

Regards,

SNEHAL SHAH

 

AI Summary

Cenvat credit limited when erection work is subcontracted outside factory and the assessee did not render the output service.
Manufacturer availed Cenvat credit on contractor's service tax for erection at customer sites; auditor disallowed credit because the work occurred outside production premises and the manufacturer did not render the output service. Credit is allowable only where the service is used in manufacture or in relation to an output service rendered by the assessee; full subcontracting places tax liability on the contractor, while partial subcontracting may permit input credit where the assessee provides the output service. The recommended compliance step is reversal of credit with interest and pursuing refund under applicable procedures.