AVAILMENT OF CREDIT ON IMPORTED MATERIAL

[Guest]

Dear Sir, We have imported a material (machine) Capital goods first for trail purpose say in 2013 at that time we had paid appropriate customs duty but we have not availed any credit for the said material at that time.At that time we had not availed any Cenvat credit for the same because this machine was suppose to returned to vendor after successful completion of trail run within 4 months but same not returned till date. Now, we want to procure such machine which is already available at our factory but same not returned till date. Therefore please give us your valuable opinion on above scenario that whether can we avail cenvat credit of such material now.Please give us any references i.e. any case laws regarding this, thanks & regards.

AI Summary

Debate Over CENVAT Credit Eligibility for Imported Machine: One-Year Limit vs. Capital Goods Exception A company inquired about availing CENVAT credit for a machine imported in 2013, initially meant to be returned after a trial period but not returned. One expert advised that credit cannot be claimed now due to the one-year limit from the date of the Bill of Entry as per the amended CENVAT Credit Rules. However, another expert argued that this one-year rule applies only to inputs, not capital goods, and that credit for capital goods can be claimed in subsequent years, provided other conditions are met. The second expert clarified that up to 50% credit can be claimed in the first year, with the balance available in later years.