Can we take credit of.......

[Asked by Guest]

Dear All,

We have one querry , We have exported the goods and the same we have imported for repairing purpose , and paid all the duties like CVD, Addl, Custom and Cess.

It is for repairing purpose and it will be back to the party, so there has no money transaction will be involved.

We will not do payment to the party.

In this case, can we take cenvat credit of CVD and Addl duty ?

Awaiting for reply, thanks.

[KASTURI SETHI]

Repair does not amount to manufacture in terms of Section 2(f) of the Central Excise Act. When no manufacturing process is to be carried out, why to take credit ?

[Rajagopalan Ranganathan]

Sir,

You need not take credit of CVD and Addl. duty paid. Instead you can claim drawback of the duties paid at the time of re-import when you reexport the product after repair.

[KASTURI SETHI]

Sh.Trivedi Ji,

I agree with the views of Sh.Ranganathan Sir.

[Ganeshan Kalyani]

Sir, credit is allowed only if the input used is in or in relation to manufacturing activity. Repairing is not manufacturing and hence no credit allowed. Thanks

[Suryanarayana Sathineni]

Dear Friend,

It is not clear in your query , whether the import was under OGL or under re-import ( either under 94/96-CUs ) .

If it is only for re-export after repairs, the right procedure would be to import under 158/95-Cus without payment of duty or under 94/96-Cus ( on payment of only the duty prescribed therein which is cenvatable )

In view of this , as stated by Shri. Ranaganathan, the best way would be to claim DBK under Section 174 of Customs after re-export.

Best Regards

Suryanarayana

AI Summary

Cenvat credit disallowed for duties on imports used only for repair; drawback or duty suspension routes recommended.
CENVAT credit on countervailing duty and additional duty paid on goods imported solely for repair is not available because repair does not constitute manufacture; instead, taxpayers should seek customs drawback upon re export or use duty suspension/re import procedures to avoid noncenvatable duty.