Wrongly availed cenvat credit

[OM PRAKASH]

CENVAT CREDIT WRONGLY TAKEN WHILE AVAILING 50% ABATENMENT UNDER NOTF.1/2006. CAN THE AUDIT WING OF SERV. TAX DISSALLOW THE ABATEMENT? POSSIBLE LIAB. 22 LACS, CENVAT CREDIT 70,OOO

AI Summary

Query on Wrongly Availed CENVAT Credit Under Notification 1/2006; Solutions Include Reversal, Interest Payment, Revised Returns An individual raised a query about wrongly availed CENVAT credit while claiming a 50% abatement under Notification 1/2006, questioning if the Service Tax audit wing could disallow the abatement, with a potential liability of 22 lakhs and CENVAT credit of 70,000. Two responses were provided: one suggested reversing or paying the service tax with 13% annual interest to retain the abatement benefit, while the other agreed, advising payment before audit with interest to avoid penalties and filing a revised return within the due date.