Dear Experts,
We manufactures a component of submersible pump(Machine) and In notification 12/2012 One product is covered i.e. Solar Submersible pump i.e. our customer can procures Raw Material without paying duty, in List 8 And our customer is following NN 20/2016 and directs us not to add duty.
Now my question is our yield is 60% and scrap is 40% for generating 100 60 kg final product we have to procure Raw Material i.e. Electrical sheet 100 kg Now If we supplies 60 kg to our customer then first of all whether cenvat credit need to be reversed or not and secondly whether we need to reverse Cenvat credit proportionately on 60 kg of raw material or 100 kg of raw material because scrap value is not so high.
Please suggest , waiting for your valuable suggestions.
Cenvat Credit Reversal Not Needed for Solar Pump Supplies Under Rule 6(6)(iva) and Notifications NN 12/2012, 25/2012. A discussion on a forum involves a query about whether Cenvat credit needs to be reversed when supplying components for solar submersible pumps, which are exempted under certain notifications. The original poster, a manufacturer, inquires about the reversal of Cenvat credit due to the yield and scrap ratio in production. Various experts respond, suggesting that if excise duty is paid on the scrap, credit reversal may not be necessary. They reference Rule 6(6)(iva) and notifications NN 12/2012 and NN 25/2012, indicating that the supply for solar projects may not require credit reversal. The conversation concludes with a consensus that the manufacturer's situation is covered under the specified rules and notifications. (AI Summary)
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