Surrneder of Registration Certificate

[Guest]

Dear Sir,

We have registered one premises as manufacturer but from last three years we we don't doing any manufacturing activity in this premises we regularly filing the Excise and service tax return periodically. We have pending two SCN's which is pending on CESTATE Ahmedabad duty involved approx 12 lacs and we have Cenvat & service tax credit balance approx 44 lacs. We have closing balance of stock also which are laying in this premises. Now we want to remove all the stocks with debit of Duty when our building will be full vacant. We want to demolish the factory building and cancel the registration certificate.

My question is how we will process for cancel the Registration. As our two cases are pending at CESTATE and also what about our Credit balance of Cenvat and Service Tax ?

[Suryanarayana Sathineni]

Dear Friend,

You can apply for cancellation of the existing excise registration while surrendering the original certificate to the department clearly explaining the reasons set out in your query after completely disposing the materials lying in stock after payment of duty from Cenvat since the balance if any left out may not be refunded in the normal circumstances.

While surrendering the Registration certificate, you also have to give an undertaking in the cancellation request letter, that you will undertake to pay all the dues to the Department in case the pending appeals are decided against us subject to reserving your right to appeal if necessary in the higher appellate forum.

Best Regards

Suryanarayana

[Ganeshan Kalyani]

You would have done Pre-deposit or payment under protest. If done so department should not stop you to do what you intend as explained in your query. Also you are having cenvat credit more than the disputed amount. Thanks.

[KASTURI SETHI]

Agreed with both experts. In such a situation there is no restriction for surrender of registration certificate. Registration will be cancelled only after the Govt. dues are realised. Till then 'NIL' return has to be filed, other wise ACES system will treat the assessee as defaulter as NON-FILER of return. Being NIL return A.C./D.C. may give permission for not filing return but the system will continue to treat the assessee as defaulter till the date of cancellation in the system.

[Ganeshan Kalyani]

Sir I think filing nil return would pose problem, because if delayed penalty notice may be issued. So either to keep the number active and filing return within due date or applying for cancellation is upon the querist to choose the one. There is fruits in two baskets and to choose from either basket is upon the querist. Thanks.

[KASTURI SETHI]

Totally concurred with your views, Sir. The assessee is to opt for the route where he feels comfortable.

[Rajagopalan Ranganathan]

Sir,

You can surrender the registration certificate. However, the department will not cancel it since cases are pending in CESTAT. Till cancellation of the registration certificate you have file nil return since you have closed the manufacturing unit. There is no escape from this formality.

[Suryanarayana Sathineni]

Dear Friend,

Alternatively, you may please try additional option in addition to the undertaking , after discussing with the Department executing a Bond to the vlaue of the amount involved in the dispute backed by a Bank Guarantee for which I am of the view that the Department may accept and cancel your Registration.

Alternatively, if you have any plans to sell this factory or to give on lease to another manufacturer, and if so while they apply for fresh Registration, then department will issue registration to them after taking undertaking that they would take the responsibility of the disputed amount if it is decided against subject of course depending on the internal understanding between your company and the prospective Buyer /lessee.

Best Regards

Suryanarayana

[Guest]

Dear All,

Thank you very much for your suggestion can we demolish the factory building after applying online for surrender of Registration Certificate. As our Cenvat closing balance is there and also pending case in CESTATE Ahmedabad, If we want to continuing the the our registration certificate can we add the business place as our Head office as our Head office is remain same. And remove the factory address from our registration certificate with an application for amend of registration certificate.

Regards

Swapneswar Muduli

[Ganeshan Kalyani]

In my view it is better to seek permission from jurisdictional excise authority. Thanks.

AI Summary

Surrender of excise registration requires an undertaking or security; cancellation withheld until dues or bank guarantee provided. Surrender the original excise registration after disposing of stock and paying duty from Cenvat; provide an undertaking to pay departmental dues if pending appeals are decided against you. The department will not cancel registration until dues are realised or adequate security (such as a bond backed by a bank guarantee) is furnished. File nil returns after closure unless permitted otherwise; refunds of residual Cenvat or service tax credit are not assured in normal circumstances.