Captive consumption

[NANDA H.L.]

Dear Experts

1. We manufactured one CNC machine & made captive consumption without payment of duty under notification No.67/95, manufactured in the year September 2012, valued at ₹ 7.05 lakhs. We have availed input credit of ₹ 35000.00 (including Cess)
2. During captive consumption we have made the self invoice & communicated to Range office with cost accountant certificate
3. Now we are planning to sell the same. Need a clarification, what is the duty to be charge & also duty availed on the inputs used to be reverse?

Please clarify.

AI Summary

Manufacturer to Pay Duty on CNC Machine Sale; No Input Credit Reversal Needed per Notification No. 67/95 A manufacturer inquired about the duty implications for selling a CNC machine initially used for captive consumption without duty payment under Notification No. 67/95. The machine, valued at 7.05 lakhs, was manufactured in 2012, and input credit of 35,000 was availed. Experts advised that duty should be paid on the transaction value when selling the machine. They clarified that since the machine was used in producing a dutiable final product, no reversal of input credit is necessary. Rule 3(5A)(a) of the Cenvat Credit Rules, 2004, regarding capital goods removal, was deemed inapplicable in this case.