Inter Plant transfer of Capital goods

[RAJESH IYER]

 Notification 12/2013 amendment of CCR is as under:

(5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-

(i)     for computers and computer peripherals:

 

for each quarter in the first year at the rate of 10 percent

for each quarter in the second year at the rate of 8 percent

for each quarter in the third year at the rate of 5 percent

for each quarter in the fourth and fifth year at the rate of 1 percent

 

(ii)    for capital goods, other than computers and computer peripherals at the rate of 2.5 percent for each quarter:

Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

(b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.”

My Question is in the case of Inter Plant transfer of Capital goods as such, Transaction Value is applicable or not, as there is no sale.

RAJESH.N

[PAWAN KUMAR]

In case of Inter Plant Tranfer of capital goods as such, transaction value is not applicable.

[YAGAY andSUN]

Above Rules does not use the word "Sale".  These Rules says about removal.

Accordingly, transaction value would be the basis of calculation of C.E.Duty on the capital goods.

AI Summary

Removal of capital goods: transaction value may determine excise duty when CENVAT credit adjustment applies on inter plant transfers. Removal of capital goods on which CENVAT credit was taken requires payment equal to the CENVAT credit reduced by prescribed quarterly straight line rates, with separate schedules for computers and peripherals and for other capital goods; if that calculated amount is less than the duty leviable on transaction value, the duty payable shall be equal to the duty on transaction value, and clearance as waste or scrap requires payment equal to duty on transaction value.