Rule-6.3(1)

[Asked by Guest]

Dear Sir.

We are manufacture of Auto parts now we are planning to manufacture of Sewing machine parts also . sewing machine parts are exempted. My question is below.

1 – We amend RC.

2-we are eligible Rule 6(3)(1) of reversal of cenvat credit of 6%.

[Ganeshan Kalyani]

Yes you can either maintain separate books of accounts or go for 6% reversal of cenvat credit.

[Rajagopalan Ranganathan]

Sir,

You are eligible to follow rule 6 (3) (1) of Cenvat Credit Rules,2004. What is your doubt? Please elaborate.

[KASTURI SETHI]

For amendment in Registration Certificate, go through Notification No. 7/2015-C.E. (N.T.) dated 01-03-2015.(Para No. 2 refers.

[CSSANJAY MALHOTRA]

Dear Mr. Prabhakar,

Please note that if the Inputs are common for the manufacture of both Auto Parts and Sewing Machine Parts, you can go ahead with the options as per law cited by my Seniors in this trailing concern of yours.

Do undertake anaylsis as to which option is better for you (a) Availing CENVAT on common Inputs and afterwards paying duty @ 6% on value of exempted goods OR

(b) Maintaining separate set of books if inputs are identified on one to one basis. Not availing CENVAT or reversing the same on actual basis.

[Mahir S]

Yes, all replied posted above are relevant to your query and agreed.

[Suryanarayana Sathineni]

The views expressed by all our learned friends are right and very clear. You may have to proceed with the following before exercising the option suitable to you.

After your carrying out an analysis whether reversal of cenvat credit on common inputs is beneficial over taking credit on common inputs and reversal of 6% on the product value at the time of clearance.

Before taking the beneficial one , you have to exercise that option and inform the same to your jurisdictional Excise Authorities. Pl. note once the option is exercised by way of intimation , you cannot withdraw the same in the remaining part of the financial year in which you have exercised the option.

Regards

Surya

AI Summary

Reversal of cenvat credit or separate accounts option requires notifying authorities and is irrevocable for the financial year.
A manufacturer introducing exempt sewing machine parts may either amend registration and follow the prescribed reversal under Rule 6(3)(1) or maintain separate books and identify inputs so Cenvat is not availed. If inputs are common, choose between availing credit and later reversing at the prescribed rate on exempt clearances or segregating inputs and reversing on actual basis. The chosen option must be intimated to the jurisdictional excise authorities and cannot be withdrawn for the remainder of the financial year.