Capital Goods

[Guest]

we are manufacturer of storage system ,if we will manufacture Storage system as Demo Machine that time we liable excise duty anf if applicable so can we cenvat credit 50% in this year and 50% balance next year

[Mahir S]

As storage system being capital goods and used captively, hence no need for payment of exicse duty therefore no question of availment of cenvat credit.

However, if it is cleared from factory premises, then duty is required to be paid,

AI Summary

Capital goods excise duty treatment: captive use of demo storage systems avoids duty and cenvat credit. Capital goods treatment for a storage system manufactured as a demo machine depends on use and clearance: retained for captive use within the factory it does not attract excise duty and no cenvat credit arises; if cleared from factory premises as a removal, excise duty is payable and cenvat credit treatment follows removal rules.