Sir,
We have made an import of components( Inputs) for making an engine. After some time sale of the said engine is stopped.
Now , we are having of inventory of imported components ( inputs). Our marketing Team has searched another independent foreign customer to buy ,as such ,the said unused components( inputs), . However price offered by the Foreign customer is less than 70% of imported price of the said inputs .
Now our query is that at the time of export , do we need to reverse the credit of the CVD, to that extent , taken at the time of import of the said inputs.?
Regards
Pradeep Jain
Company Must Reverse CVD Credit on Export of Unused Engine Components Sold Below 70% Import Price Under Rule 3(5). A company imported components for engine manufacturing but ceased engine sales, leaving unused inventory. They found a foreign buyer offering less than 70% of the import price. The query is whether they need to reverse the CVD credit taken at import upon export. Responses highlight that under Rule 3(5) of Cenvat Credit Rules, 2004, if inputs are removed as such, the credit must be reversed. However, export under LUT without duty payment is possible, as clarified by previous circulars and rulings. Further references and clarifications were mentioned to address the situation. (AI Summary)
TaxTMI 
TaxTMI 
