Credit of Duty paid on import of Lab. Equipments

[sachin shilamkar]

We are first stage dealers (importer) of essential oils. We need to import lab equipment which will be used to do testing of imported material.

Can we take credit of import duty (CVD & ACD) paid while importing of Lab equipment.

[Rajagopalan Ranganathan]

Sir,

If testing of essential oils amounts to 'manufacture as per Central Excise Act, 1944/Central Excise Tariff Act, 1985 then you have to pay central excise duty on such oils when you market the same. If testing does not amount to manufacture and the same is not excisable then you cannot avail the credit of CVD & ACD (SAD).

[Ganeshan Kalyani]

Sir, the input output nexus need to be checked for taking credit. Thanks.

AI Summary

Credit of import duty depends on whether testing qualifies as manufacture and establishes an input-output nexus. Availability of credit for CVD and ACD on imported laboratory equipment hinges on whether testing of essential oils qualifies as manufacture rendering the oils excisable; if so, credit may be claimed against excise liability, but if testing is not manufacture and oils are not excisable, credit cannot be availed. Claimants must also prove the input-output nexus between the equipment and the output to substantiate any credit.