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

Cenvat credit utilization allowed for EOU debonding to meet duty on DTA clearances or claim refund.
Accumulated Cenvat Credit of an EOU being debonded can be adjusted against duty on DTA clearances or claimed as a refund; reliance is placed on Rule 17(1) of the Central Excise Rules, Rule 5 of the Cenvat Credit Rules, 2004, Board circular no. 799/32/2004-CX and Notification No. 18/2004-CE (N.T.) recognizing EOUs' entitlement to the Cenvat Credit scheme.