oInput credit taking against supply of materials to Power project

[Varghese Kurian]

Sir,

We are manufacturer and supplier to BHEL. BHEL has given us PAC to supply of materials to NTPC MEJA Power projects. We have taken Excise credit for Inputs and supplied to BHEL ,NTPC site under nil duty. Excise auditor says only imports are allowed to take credit as per Rule 6(6)vii ,local supply input excise duty cannot be taken credit.Kindly help us to counter the argument

AI Summary

Clarification: Local Supplies to Mega Power Projects Qualify for Excise Credit Under Rule 6(6)(vii) and Notification No. 12/2012. A supplier to a power project, working with BHEL, raised a query about taking excise credit for inputs supplied under nil duty. The excise auditor argued that only imports are eligible for such credits under Rule 6(6)(vii) of the Central Excise Rules. In response, it was clarified that local supplies to mega power projects can also qualify for excise credit, as these are considered deemed exports under Notification No. 12/2012-Central Excise. The reply emphasized reviewing the relevant rules and notifications to counter the auditor's argument.