Cenvat credit on capital goods

[S.C. WADHWA]

Dear Experts,

We are manufactures of dutiable products of chapter 20 and 21 and paying duty @2% as mentioned in general exemption no.46 when no cenvat credit on input availed.

Now my query is whether we are elible to get cenvat on the purchase of capital goods i,e machinery,generator etc. Please give your expert opinion.

Regards,

WADHWA

AI Summary

Cenvat credit on capital goods may be disallowed where goods are treated as exempted under the general exemption.
The CENVAT Credit Rules define 'exempted goods' to include goods in respect of which the benefit of the general exemption is availed; a rule in those Rules disallows CENVAT credit on capital goods used exclusively in the manufacture of exempted goods. Consequently, even where an exemption notification provides for clearance at a concessional duty rate and a proviso refers only to input credit, the overriding effect of the CENVAT Credit Rules renders credit on capital goods unavailable for goods treated as exempted under the notification.