Cenvat credit on machines utilised both for own manufacturing as well as job work.

[Narendra Soni]

Dear Expert,

We are manufacturer and also doing job work of other units.Our machines are utilised both for our own manufacturing as well as job working.Can we avail cenvat credit on machines which are utilised both for own manufacturing and job work products.

Tahnks.

[YAGAY andSUN]

Dear Sir,

It is settled legal position that if Capital Goods are being used for manufacturing of dutiable as well as exempted goods, even then CENVAT credit on such capital goods would be available. The only condition in this regard is that Capital Goods should not be used exclusively for manufacturing of exempted goods.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Yagay and Sun

[KASTURI SETHI]

Undoubtedly Yagay and Sun have correctly replied. Clearly explanied.

AI Summary

Manufacturers can claim CENVAT credit on machines used for own production and job work, excluding exempt goods. A manufacturer inquires about the eligibility to claim CENVAT credit on machines used for both their own manufacturing and job work for other units. The consensus among respondents is that CENVAT credit is permissible as long as the machines are not used exclusively for manufacturing exempted goods. The replies confirm that this is a settled legal position, with agreement from multiple contributors, including Yagay and Sun, Mariappan Govindarajan, and Kasturi Sethi, who all affirm the correctness of this interpretation.