Availment of Cenvat Credit on Capital Goods

[HImanshu Singh]

Respected Members, I would Like to ask a query relating to CCR on Captal Goods:

1. A Factory Purchased the duty paid capital goods during the period when it was availing an exemption, due to exemption factory did not availed the CCR on capital goods as its final products were Exempted.

Subsequently Govt. withdrew the said exemption and all the final products become duitable, in that case whether factory can avail the CCR on Capital Goods which were purchased during the period of exemptions as the capital goods are continued to be used in the factory? If Yes then what will be time limit for the same?

2. A factory Manufacturing Taxable and exempted both types of final Products, it purchased a capital goods which is commonly used in manufacturing of both taxable and exempted Products. Whether CCR can be availed and utilized for payment of Excise duty on Dutitable Products? If Yes then what will be time limit for the same?

Please give your valuable comments on the same.

AI Summary

Cenvat credit on capital goods: available when not exclusively used for exempted output; timing and proportion governed by Cenvat rules.
Cenvat credit on capital goods bought during an exemption is permissible when the goods are not exclusively used for exempt supplies; the one year restriction does not apply to capital goods. Credit is barred where depreciation has been claimed on the excise component. Relevant Cenvat Credit Rules govern timing and proportionate quantification of credit, and both Board circulars and Tribunal decisions (noted by contributors) bear on temporal eligibility, with Notification No.13/2016 CE introducing a limited ineligibility window.