Reversal of Cenvat credit

[Pushkar Gupta]

Dear Sir

It has been sold Goods electrical equipment under mega power project without excise duty, customer has given certificate under Notification 12/2012 central excise SL 339 as amended 34/2012 for excise duty exemption. Following are my queries.

1. Is it required to reversed Cenvat creditunder Rule 6.

2. If yes how to intimate Central excise Deptt when we have already filled excise return. Since goods has been cleared in various months.

Thanks in advance.

Pushkar Gupta

[Ganeshan Kalyani]

Sir if the final product is exempt then the reversal of input tax credit taken is warranted.

Now the provision of revised return in excise is also introduced. Than.

[KASTURI SETHI]

Agreed with Sh.Ganeshan Kalyani, Sir. If you have committed this lapse in so many returns, you can reverse credit along with interest. Interest has to be paid in cash. If you find some problem in filing revised return, you may show the amount reversed in ER-1 return for April, 16. Show interest paid in the column for arrears.

[Pushkar Gupta]

Dear Sir

When Goods has been sold under notification 12/2012 under Sl 339 without excise duty to Ultra Mega Power under Project Authority Certificate- PAC certifies by Ministry of Power. Is it is required to reverse cenvat credit 5% in case supply of goods to Ultra Mega Power Project.

Please suggest on above situation.

Thanks

Pushkar Gupta

[KASTURI SETHI]

Dear Sh.Gupta Ji,

You are to examine whether you fulfil the conditions laid down under Notification No.12/12-CE as amended. Whether your product is covered under this notification or not ? There must be terms and conditions in the agreement with your buyer. If your goods are covered under this notification and you fulfil all the conditions, then no reversal is required. There should be no intermediary. Supply should be direct for the mega project. Without going through terms and conditions, concrete reply is not possible. During my service I have seen lapses in such situations which resulted into reversal along with interest and penalty. No doubt supplied made under this notification does not require reversal under Rule 6(3) of the Credit Rules. So go word for word of notification vis-a-vis agreement..

AI Summary

Reversal of Cenvat credit may be required where notification conditions are unmet, otherwise no reversal if conditions satisfied. If the supplier fails to meet Notification No.12/2012 conditions or the product is not covered, reversal of Cenvat credit is required with interest paid in cash and adjustments made via revised returns or ER-1; if all notification conditions are satisfied and supply is direct with no intermediary, no reversal is necessary.