Cenvat credit on unlicensed product line.

[Samik Chaudhuri]

Sir

We are a food manufacturing Co, and we are having various lines out of which one line is not get licensed as a result our production related to that line is stopped. Moreover we have already taken Cenvat credit of that machinery. Now what should be done regarding that Cenvat credit.Please suggest me.

With thanks and regards

Samik Chaudhuri.

[PAWAN KUMAR]

Dear Sir,

As per my view, If you have installed new line into your production plant and machinery for new goods manufacturing, you need to file an amendment in registration certificate and get the same approved by your jurisdiction AC/DC. If you have installed new line of production for manufacturing goods for increasing the produciton capacity, no new goods is to be manufactured. Intimate to jurisdiction AC/DC with a copy to your range regarding addition of new line of production and it will result increase in your production capacity as per the market demand.

[Rajagopalan Ranganathan]

Sir,

If the machinery is used for production of any other goods for which you have got licence, then the cenvat credit taken by you is in order.

[varun arora]

Further In any case f Production Capacity gets increased by 25% Then file E

[varun arora]

Further In any case any substantial Addition of machineries is carried out during the year resulting into increase in the installed capacity by more than 25% of one class of product, an amendment to the declaration should be filed within 30 days of commencement of production of these new machineries.

AI Summary

Cenvat credit compliance: amendment to registration required for new or unlicensed production lines and for significant capacity increases.
If new plant and machinery are installed for a new product line or capacity expansion, the assessee must file an amendment to the registration certificate and notify the jurisdictional AC/DC; if the machinery is used to produce goods already covered by the existing licence, the Cenvat credit claimed is in order. Where substantial addition of machinery increases installed capacity beyond the prescribed threshold, an amendment (form E) should be filed within thirty days of commencement of production of those machines.