cenvet credit urgent query

[shruti gupta]

Hi,

The query is our company is into service industry. we are having two units, one of which is 100% EOU and the other one is typically into providing services within India. As one unit (EOU) dont have output service tax, we get rebate under cenvat credit for the input service taxes. The other one (domestic) is having output service tax and we claimed cenvat credit on the input service taxes. For Ex: in case of export : Rs.1000 is turnover and the input service tax is Rs.100 and in case of domestic service, the output service tax is 120 and input service tax is 60. We claimed Rs 100 as rebate towards export (the input service tax paid) and we paid Rs. 60 after availing cenvat credit (120-60). Service Tax dept denied the claim on the basis assessee cant have both the benefits simultaneously. I would request you to help me out , if is there any case law available so that our claim can be sustained.

AI Summary

Service company advised to choose between rebate for EOU or Cenvat credit for domestic services to avoid penalties. A company in the service industry with two units, one being a 100% Export Oriented Unit (EOU) and the other providing domestic services, sought clarification regarding their Cenvat credit claims. The EOU unit claimed a rebate for input service taxes due to no output service tax, while the domestic unit claimed Cenvat credit against output service tax. The Service Tax Department rejected the simultaneous benefit claims, stating that both cannot be availed concurrently. The company sought guidance on whether any case law supports their claim. The response advised relinquishing one benefit to avoid penalties and interest.