Cevat credit available on capital goods of Bakery Machineries?

[Samik Chaudhuri]

Sir

Our manufacturing co also product Bakery product which does not attract excise now can we avail cenvat credit on machinery of Bakery lines.Please suggest me.

With thanks and regards

Samik Chaudhuri.

[YAGAY andSUN]

Dear Samik,

If capital goods are being used exclusively for duty exempted final goods, then, no CENVAT credit would be allowed. It is mentioned in the CENVAT credit Rules, 2004 and is a settled position in this regard.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[DR.MARIAPPAN GOVINDARAJAN]

CENVAT credit could not definitely be taken.

[Mahir S]

Sir,

If your bakery items are not under excise, as per your note; then why do u need to avail cenvat credit thereon, and how can you be registered with excise if your items itself is not excisable.

AI Summary

Cenvat credit denied for capital goods used exclusively to produce duty exempt goods; registration and eligibility must be reassessed. If capital goods are used exclusively for the manufacture of duty exempt final products, Cenvat credit on those capital goods is not available under the CENVAT Credit Rules, 2004; exclusive use for exempted goods precludes claiming credit, and registrability should be re examined when outputs are non excisable.