Credit Received on Post manufacuring activity can i avail credit for central excise payment

[Ramesh M]

We are manufacturer of conveyors, we will manufacture goods in semi finished condition and clear under central excise duty payment to our customer place.  At our customer site we will erect / assemble the all parts and trail the equipments and we will commission the entire plant.  At our customer site all the activities done by our sub vendor, they will complete the work and submit the bill to us with Basic Value + Service Tax.  In this case our HO getting Input service credit on Vendor Bill.  Our HO also have ISD registriation and through ISD our HO transfered accumlated credit to our manufacturing unit.  Now department is objecting to transfer credit and availing credit at factory, because they said "your HO is getting credit on erection, purely it is post manufacturing / post sale activity so credit is not allowed at manufacturing unit.

Kindly advice me, if any case laws to come out this issue.

 

AI Summary

Cenvat credit entitlement for erection and commissioning services hinges on contractual allocation and who bears service tax burden.
Whether CENVAT credit is admissible for service tax on erection, assembly and commissioning done by a subcontractor at the buyer's site after removal: credit may be allowed if the manufacturer separately treats erection as an output service charged with service tax or if subcontractor charges are included in the assessable value at removal, and contractual divisibility and allocation of duty versus service tax are relevant; alternatively, such services may be treated as consumed by the buyer and not input services of the manufacturer unless the manufacturer itself discharges the service tax on those services.