Clarification on cenvat credit before registration

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

One of my client doing manufacturing of pvc windows and got registered with the central excise department by two days ago. However, he has crossed the threshold limit of ₹ 1.5 Crores in the last financial year in the month of March'2015. And the majority of the raw materials are imported goods. Now, we have suggested the client to pay the excise duty since crossing the threshold limit after deducting the threshold limit. Now, my question when he is ready to pay the excise duty along with the interest, will he be eligible to avail the cenvat credit which he was imported.

Can you provide the suggestion on the aforesaid subject, its very urgent.

With regards,

K. Thyagarajan

[Rajagopalan Ranganathan]

Sir,

Since you have crossed the limit of 1.5 crore in March 2015 (i require exact date to advice whether you have to pay duty during the remaining period of March 2015), you can avail the SSI exemption from 01.04.2015 again. But if you want to pay duty from the first clearance made from 01.04.2015, you can tale credit of duty paid (CVD and SAD) on the imported raw materials and also on raw materials contained in unsold stock, work-in-progress provided you have documentary evidence to prove the duty paid nature of imported raw materials and locally procured raw materials. .

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

Thanks for your kind response. They have crossed threshold limit by 12th March 2015.

[S G]

Vide notification no.08/2003 dated 01/03/2003 the govt. has given various concessions to small scale industries (SSI). All industries (even large scale unit) irrespective of their investment or no. of employees are eligible for concession only if their turnover in previous year was less than ₹ 4 crores.

Example:Units whose turnover was over ₹ 4 crores in 2006-07 are not eligible to any SSI concession in 2007-08, they have to pay full normal duty from 1^stApril, 2007 and if turnover is less than ₹ 4 crores in 2006-07 such units are eligible for SSI exemption upto ₹ 150 lakhs in 2007-08.

However SSI units have the following options of exemptions: -

(a) A manufacturer can avail full exemption upto ₹ 150 lakhs and pay normal duty thereafter and can avail Cenvat credit on inputs after crossing exemption limit of turnover of ₹ 150 lakhs in the financial year, or

(b) A manufacturer has the option not to avail the exemption and instead pay the normal rate of duty and avail Cenvat credit.

Option (b) is available any time during the year, but this option once availed cannot be withdrawn during the financial year.

Thanks!!

AI Summary

Cenvat credit eligibility: pay duty and claim credit on imported inputs and stock if documentary proof exists. A manufacturer exceeding the SSI turnover threshold may either use the exemption until crossing and then pay duty and avail cenvat credit, or elect to forgo the exemption and pay duty with cenvat credit from the earlier date; credit is claimable on import duties and on inputs in unsold stock or work in progress where documentary evidence proves the duty paid nature. The election to opt out is exercisable during the year but, once made, is irrevocable for that financial year.