Reversal of ED on Machine sent under CENVAT Credit Rule 4(5) (a) Challan

[Pradeep Jain]

Dear Sir,

Our Company having a Capital Goods (machine )20 years old . The same machine has sent for refurbishment on the basis of returnable challan under CENVAT Credit Rules 4(5) (a). Time involve in refurbishment is around one year. Now after completion of 180 days do we need to debit excise duty under sub-clause (I) of CENVAT Credit Rules 4(5) (a) .

Please advise.

Regards

Pradeep Jain

AI Summary

Reversal of CENVAT credit required when capital goods sent for refurbishment are not returned within the prescribed period.
Reversal of CENVAT credit is required when capital goods sent on a returnable challan for refurbishment are not received back within the period prescribed; the manufacturer must debit the CENVAT credit or otherwise pay an amount equivalent to the attributable credit and may re avail the credit when the goods are returned. Administrative commentary highlights that interest on delayed reversal and re credit is not provided under current rules but is proposed to be addressed in GST.