Transfer of Capital Goods by unit covered under Large Tax Payer Unit

[Pradeep Jain]

Dear Sir,

Our Company is member of Large Tax Payer Unit , New Delhi , having 3 units at different location. In case of transfer of Capital goods from one unit to another unit do we need to pay Excise Duty on such capital goods.

Kindly give your valuable opinion.

Regards

Pradeep Jain

[Ganeshan Kalyani]

Sir, different location means different registration numbers. When removed from one factory in my view the Cenvat credit need to be reversed and credit can be availed in the receiving factory. Further i welcome views of my colleague experts. Thanks.

[KASTURI SETHI]

Sh.Pradeep Jain Ji,

There are two case laws on this issue in favour of assessee:-

2014 (305) E.L.T. 476 (Guj.) = 2013 (11) TMI 1031 - GUJARAT HIGH COURT CENTRAL EXCISE, CUSTOMS & SERVICE TAX Versus PATEL ALLOYS STEEL P. LTD.

2013 (293) E.L.T. 264 (Tri. - Ahmd.) = 2013 (12) TMI 167 - CESTAT AHMEDABADPATEL ALLOYS (STEEL) (P) LTD. Versus COMMISSIONER OF C. EX., AHMEDABAD

 

[Ganeshan Kalyani]

Excellent reply submitted by Sri Kasturi Sir. It cleared the doubt of the querist in one go. Thanks

[Rajagopalan Ranganathan]

Sir,

Please go through rule 12Bb of Central Excise Rules, 2002 for detailed procedure for removing credit availed inputs and capital goods from one manufacturing unit to another manufacturing unit of the mermber of LTU

[YAGAY andSUN]

Yes, Rule 12BB is the relevant provision in this regard.

[Ganeshan Kalyani]

Enriching knowledge. Thanks experts.

AI Summary

Transfer of capital goods requires reversal and re availment of Cenvat credit under Rule 12BB, with case law support. Transfer of capital goods between units under a Large Taxpayer Unit requires reversal of the Cenvat credit by the sending unit and re availment by the receiving unit, with the detailed procedure governed by Rule 12BB of the Central Excise Rules and supported by appellate decisions favoring taxpayers when procedural compliance and proper documentation are followed.