Availment of cenvat credit of service tax paid and refdund under rule 5 of cenvat credit rules

[Asked by Guest]

A 100 % EOU unit is manufacturing excisable goods which are exempted from Excise duty by virtue of Notification. The unit has received certain taxable input services for their manufacturing / clearance activities. Further the unit has no DTA sales. Can the unit avail the credit of input service tax paid by them and claim refund under rule 5 of Cenvat credit rules .

AI Summary

Cenvat credit refund: EOU may reclaim service tax credit where input services are used in export-linked manufacture.
Under Rule 5 of the Cenvat Credit Rules, where inputs or input services are used in manufacture of final products cleared for export under bond or letter of undertaking, or in providing exported output services, the CENVAT credit (including input service tax) may be utilized against excise or service tax liabilities or, if such adjustment is not possible, refunded subject to prescribed safeguards and conditions; this permits a 100% EOU that uses taxable input services in export-linked manufacture and has no DTA sales to claim refund of service tax credit under the notified framework.