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

Excise Duty Clarified for Storage Systems: No Duty or CENVAT Credit for Captive Use, Duty Required if Cleared. A manufacturer of storage systems inquired about the applicability of excise duty and CENVAT credit on demo machines. The response clarified that if the storage system is used captively as capital goods, there is no need to pay excise duty, and thus, no CENVAT credit can be availed. However, if the storage system is cleared from the factory premises, excise duty must be paid.