Cenvat cr - EOU Unit by debonding

[Rajan Rajan]

Sir, We are closing one EOU Unit by debonding everything.

We have some accumulated Cenvat Credit.

Query: Can we adjust this cenvat credit and pay the balance duty, also provide some case law if any

[DR.MARIAPPAN GOVINDARAJAN]

You can adjust the same against the payment of duty.

[Mahir S]

The accumulated credit may be utilized for payment of duty on DTA clearances or can be claimed as Refund. Also refer to Rule 17(1) of the Central Excise Rule, 2002.

Further, a portion of Board's circular no. 799/32/2004-CX, DT. 23/09/2004 is reproduced below :

It has been observed that EOUs are entitled to avail CENVAT Credit Scheme w.e.f. 06.09.2004 vide notification No. 18/2004-CE (N.T.) dated 6.9.2004. Thus, the EOUs who receive duty paid goods can avail input credit for the duty paid on such goods and utilize the credit for payment of duty on DTA clearances and if for some reasons, the credit cannot be utilized, the same can be claimed as refund under Rule 5 of Cenvat credit rule 2004,

AI Summary

Entity Closes Export Unit, Can Use Accumulated Cenvat Credit for Duties or Refunds per Rule 17(1) and 2004 Circular. An entity is closing an Export Oriented Unit (EOU) by debonding and inquires about utilizing accumulated Cenvat Credit to pay remaining duties. Two responses were provided. The first response confirms that the credit can be adjusted against duty payments. The second response suggests using the credit for payment on Domestic Tariff Area (DTA) clearances or claiming it as a refund, referencing Rule 17(1) of the Central Excise Rule, 2002, and a Board's circular from 2004, which allows EOUs to avail Cenvat Credit and utilize it for duty payments or claim refunds if unused.