Eou Exit and duty on materials from availabe CENVAT credit.

[Mitesh Gandhi]

Dear sir,

We have recently exit from EOU scheme, while exit we paid duty on RM/WIP and stocks from available CENVAT/ST credit for the goods imported without payment of duty under PC/CT3.

We have received query saying that the CENVAT credit can not utilize while exit from EOU, and while calculating duty liability of imported materials, can any body suggest is there is specific noti or circular in Customs or CE rules 1944 which clearly says whether the above transaction is allowed or dis allowed.

thanks

Mitesh

AI Summary

Entity Exiting EOU Scheme Cannot Use CENVAT Credit for Duty Payments on Raw Materials and Stock Per FTP Rules An entity exiting the Export Oriented Unit (EOU) scheme inquired about using CENVAT credit to pay duties on raw materials, work-in-progress, and stocks imported without duty under specific provisions. A response clarified that according to Foreign Trade Policy (FTP) provisions, EOUs must pay duties on available stocks and work-in-progress. While EOUs can use CENVAT credit for certain payments, such as on Domestic Tariff Area (DTA) sales and specific clearances, other payments must be made in cash through a Personal Ledger Account (PLA). The response suggests that the original query's proposed use of CENVAT credit is not permissible.