Whether Rule 6 of CENVAT credit rules applies where CENVAT not availed?

[Yatin Bhopi]

Dear experts,

We are manufacturer. we have sold old scrap equipment in 2016-17 which was purchase prior to 1994 (prior to CENVAT scheme). We have not paid excise duty since no CENVAT credit availed on said capital goods.

Our EA2000 audit is going on and auditor has argued that these clearance is nothing but exempted goods and Rule 6 of CCR 2004 will applicable and we have to pay 7% since we may have used various services to clear these goods (like security service, maintenance service, telephone service, online auction service, etc).

Please let me know legality in this case

AI Summary

Experts Confirm Rule 6 Inapplicable for Pre-CENVAT Scrap Sale; Excise Duty Payment Sufficient A manufacturer queried whether Rule 6 of the CENVAT Credit Rules (CCR) applies when CENVAT credit was not availed on old scrap equipment sold, which was purchased before the CENVAT scheme. An auditor suggested that these goods are exempt and Rule 6 applies, requiring a 7% payment due to services used for clearance. Experts in the forum, including YAGAY and SUN, advised that Rule 6 is not applicable since excise duty on the transaction value suffices. The query was resolved, with the auditors closing the case.