Seperate account of cenvatable consumables are required under CER 6(3). - Reg.

[Rajavarapu Nageswar Rao]

Dear Sir/s,

We are leading manufacture of industrial products and we have registered in CER.  Very recently AGs audit conducted in our unit and objected that there is no separate cenvat account for dutiable and exempted goods on  LPG & Furnaceoil  cenvat credit.  Expect LPG & Furnaceoil   all other inputs we have maintained separate account as per Rule 6 of CER.   In our account books also we have booked these above two items are under consumables catogery.

Now CE range office issued letter regarding to reverse the cenvat credit  proporniately on the above two inputs (LPG & Furnacoil) . 

Please let us know what is the legal position and  can we reverse the differential credit as per RO letter. 

Regards,

R Nageswar Rao,

8801111356

AI Summary

Manufacturer Must Reverse Cenvat Credit for LPG, Furnace Oil; No Distinction Between Inputs and Consumables, Rule Applied A manufacturer faced an audit objection for not maintaining separate Cenvat accounts for dutiable and exempted goods concerning LPG and Furnace oil, which were categorized as consumables. The Central Excise office requested reversing the Cenvat credit proportionally for these inputs. In response, it was clarified that there is no distinction between consumables and inputs for Cenvat purposes. Since LPG and Furnace oil are used in manufacturing both dutiable and exempted products, the manufacturer must reverse the credit. The reversal amount is calculated based on the turnover ratio of dutiable to total goods.