AVAILMENT OF CREDIT ON IMPORTED MATERIAL

[Asked by 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

Cenvat credit on capital goods may be claimed under phased rules if possession and documentary conditions are satisfied.
A taxpayer who imported a capital machine and paid customs duty asks whether Cenvat credit can now be claimed. One opinion applies a one year proviso to the Bill of Entry and concludes credit is barred. The alternate opinion holds the one year proviso applies only to inputs and that capital goods are governed by the capital goods rule permitting phased credit (partial in year of receipt and balance later) provided the goods remain in the assessee's possession and documentary conditions are met.