CLEARANCE TO R & D UNIT

[SURYAKANT MITHBAVKAR]

If we clear materials to R and D unit without payment of excise duty under Notification No. 16/2007 C.E. dated 01.03.2007.

In view of the above we have to pay @6% on assessable value as excise duty by way of reverse cenvat credit used to Manufacturing the same Material.

Pl. advice us it is correct or not.

[Mahir S]

Yes sir, the views expressed in second para of your query is correct.

You shall have to pay 6 % of the assessable value when goods are cleared under notification no. 16/2007 dated 01.03.2007, provided the conditions mentioned in the said notification are also satisfied.

AI Summary

Excise duty liability on clearances to R&D units must be discharged via reverse cenvat credit when notification conditions apply. Clearance of goods to an R&D unit under the relevant excise notification attracts an excise duty liability on the assessable value; that liability is to be discharged by way of reverse cenvat credit applied to manufacture of the same material, provided the conditions set out in the notification are satisfied.