Excise Registration

[RAMASWAMY KRISHNAIYER]

We are having excise registration  for factory premises.  We are leasing a portion of land to another party for 50 years for putting up utility (power transmission)..  Ownership of land continue with us only.

The utility facilities are constructed by us under 'Build and Transfer' basis.

Pl clarify:-

whether cenvat credit on capital goods/inputs/input services for construction of facilities (bills are in our name) , can be availed.

Whether leasing of land out of registered premises, to be informed to Dept, whether said area to be deregistered.

[YAGAY andSUN]

No CENVAT credit cannot be availed on civil construction.  If there is nexus between the transmission of power with final product then you may avail the CENVAT credit as it is settled legal position that Ownership is no bar for availment of CENVAT credit.

Intimation should be provided to the Department and an application for change in layout plan should be submitted to the Department.

[BHARAT PUROHIT]

D/ SIRS

CREDIT IS DISALLOWED.  CREDIT IS AVAILABLE ONLY  IF INPUTS HV BEEN USED FOR PRODUCTION. U HV NOT CLAIRIFIED AS UTILITIES R CONSUMED BY U.

 

THNX/ B.B.PUROHIT

AI Summary

CENVAT credit entitlement depends on nexus to production; departmental intimation required when part of registered premises is leased. CENVAT credit on inputs, input services and capital goods for construction of utility facilities is generally disallowed for civil construction unless a clear nexus exists between the utility (power transmission) and the manufacture of dutiable final products; ownership does not bar claim. The department must be intimated and the factory layout plan changed when part of registered premises is leased for utilities; credit may be disallowed if consumption by the manufacturer and nexus to production are not established.