Unused Machine taken to our 2nd Factory.

[Samik Chaudhuri]

Sir

I would like to know a Fryer Machine is received from China on Sept.2014 and we took cenvat credit also but later it is decided to send the said unused machine to our 2nd Factory which is the out side of the state and we raised Removal of Capital goods (stock transfer) invoice and send the material asked the 2nd Factory not to take any Cenvat credit. Am i right or wrong? Please suggest me.

With thanks and regards

Samik Chaudhuri.

[PAWAN KUMAR]

Dear Sir,

You have to reverse the amount equivalent to Cenvat credit taken on such machine while sending the same to your 2nd factory under cover of the excise invoice.

[MUKUND THAKKAR]

Sir,

Stock transfer invoice is applicable in case of transfer your FG.

capital goods is not your FG. in such case you have to generate excise invoice and pay the excise duty and SAD of 4% if you have availed.

[Mahir S]

Yes, agreed with above views.

AI Summary

Cenvat credit reversal required when capital goods are transferred interstate; excise invoice and duty liabilities may arise. An imported fryer machine with cenvat credit taken was sent unused interstate to a second factory. The correct compliance is to reverse the cenvat credit when transferring the capital goods under an excise invoice. Stock transfer invoice treatment applies to finished goods only; capital goods transfers require an excise invoice and may attract excise duty and Special Additional Duty where benefits were availed.