Cenvat Credit

[Rizwan Ullah]

Assessee is involved in the manufacturing of Excisable ( Dutiable ) and Non- Dutiable ( Exempted ) product.

Common water treatment plant ( Sewerage) is being set up . Can cenvat credit be availed on capital goods purchased for the set up of such sewerage plant.

[Himansu Sekhar]

There is no restriction in the case capital goods which means if the capital goods are partly used for dutiable and partly fort exempted goods, the credit on capital goods can be taken. If the capital goods are used for exempted goods or services exclusively, then credit can not be taken. Also if the exermption is ssi exemption, credit cannot be denied. Rule 6(4) of CCR.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Himanshu.

AI Summary

Cenvat credit on capital goods: allowable when partly used for dutiable production, disallowed if exclusively for exempt production. Capital goods used partly for dutiable production and partly for exempt production are eligible for Cenvat credit; capital goods used exclusively for exempt goods or services are not eligible. An SSI exemption will not deny credit where it would otherwise be available. This reflects the allocation and exclusion principles under the Cenvat credit rules for capital goods.