cenvat credit

[narendra arora]

Dear Sirs

Incase of sales made against Excise Exemption Certificate, can we take cenvat credit of input used for final product.

Please treat this URGENT..

Narendra  

[ROHAN THAKKAR]

Dear Naren draji,

If the final product manufactured is exempt from excise because the customer provides Excise Exemption certificate, in such case, the credit of inputs or input services used in manufacture of goods shall not be eligible.

If separate goods are maintained, then the credit of goods utilised for manufacture of goods on which duty is not required to be paid because of exemption shall not be taken.

 If separate books are not maintained, then 6% of the value of exempted goods manufactured wll have to be paid.

In this regard, one may also refer to Rule 6 of  Cenvat Credit Rule, 2004

Regards,

Rohan Thakkar 

[narendra arora]

Dear Rohan ji

We are machine manufacturer and exemption certificate (Notification No. 10/97) to be received from Govt. Deptt.

Our working process is as under :

1 Order Received

2. Work Order raised for ordered machine

3. Mostly inputs procure (excisable & non excisable) against WO

4. Input issue on WO

5. Final product receive from WO

6. Sale of Final Product. 

Please advise, above process reated as seperate account and can we avail CENVAT CREDIT. ?

Regards

Narendra Arora

AI Summary

CENVAT Credit Denied for Exempted Goods Without Separate Accounts; Pay 6% of Exempted Goods' Value Under Rule 6. A query was raised regarding the eligibility to claim CENVAT credit for inputs used in manufacturing a final product when sales are made against an Excise Exemption Certificate. The response clarified that if the final product is exempt from excise duty due to such a certificate, CENVAT credit on inputs or input services is not allowed unless separate accounts are maintained. If separate accounts are not maintained, 6% of the value of exempted goods must be paid. The discussion referenced Rule 6 of the Cenvat Credit Rules, 2004, and involved a machine manufacturer seeking further clarification on their specific process.