cenvat credit

[narendra arora]

can I avail cenvat credit on those items which are procured on payment of excise duty and sale these items as such after new packing and charge excise duty at the time of sales 

[rakshit verma]

If your repacked  products are specified under section 2(f)(iii) of the CEA,1944, than you can avail cenvat credit and pay excise duty

Regards

Rakshit

e-ma0l:[email protected]

[R MUTHURAJ]

Hi,

As Mr.Rakshit pointed out, it should come with in the meaning of manufacture.

The following inputs which may be useful to you.

As per Excise rules, in respect of the manufacturing process, 
- There should be inputs (raw materials)
- They should be subjected to processing.
- As a result a new product quite different from the inputs should be obtained.
- The Finished Product must have a distinct Name, Character and Usage quite different from the inputs. 

In your case, it seems to be you are not doing the above process.

Therefore, you are not supposed to take credit and you have to clear the products on dealer basis with duly registered. 

In case you are clearing the materials As such which is procured for your own use, then  you may remove it on reversal of cenvat credit whatever you have availed.

 

Regards,

R.Muthuraj

[Vijay kumar]

Repacking amounts to manufacture u/s 2(f) only in respect of certain commodities specified under Schedule III of Central Excise Act, 1944. If your product is covered there under, you can take credit and charge excise duty on the goods sold by you. However, if it is not covered there, since the process undertaken does not amount to manufacture nor since the inputs are sold as such, you will not be in a position to take the credit at all. For further clarification, pl specify the product and chapter heading.

[narendra arora]

Thanks to all !

Vijay Kumar ji, chapter heading of our product is 79040030.

Please advise.

 

[narendra arora]

Shri Vijay Kumar ji

Awaiting for your comment.

narendra arora

AI Summary

Cenvat credit allowed only where repacking qualifies as manufacture; otherwise no credit and reversal or dealer treatment applies.
Cenvat credit is admissible only if repacking qualifies as manufacture (including commodities specified in Schedule III), meaning inputs are processed to produce a new product with a distinct name, character and usage. If repacking does not meet that test, credit cannot be availed and goods should be cleared on a dealer basis; any credit already taken must be reversed when goods are cleared as such or used otherwise.