Availment and utilisation of excise

[madhavvan n]

SSI unit has turnover exceeding rs. 90 lacs it files quarterly returns for FY 08-09 it has imported and purchased locally capital goods and accordingly has posted same in cenvat register can it utilise this credit in FY 09-10 in case the turnover crosses limit of Rs. 150 lacs and it starts charging excise duty can it utilise 100% credit in FY 09-10 of capital goods it has purchased inputs and input services in FY 08-09 can it avail this in FY 08-09 and then utilise it in FY 09-10 is there any provision where if ssi unit exports please clarify whether credit is to be availed first and then utilised availment means posting in cenvat register and utilisation is actual credit being utilised for payment of duty is this correct

[Guest]

If you refer to condition no. (iv) of para 2 of SSI notifiction no. 8/2008, which read as, " (iv) the manufacturer also does not utilise the credit of duty on capital goods under rule 3 or rule 11 of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed one hundred and fifty lakh rupees, as calculated in the manner specified in the said Table;" Means thereby that, he is allowed to take the cenvat credit but not allowed to utilize the same till the ssi exemption is over. Based on this, I believe you can avail 100% credit in FY 09-10 and utilize the same.

AI Summary

SSI exemption: cenvat credit can be availed now but may only be utilised once exemption ceases. Manufacturer under SSI exemption may avail cenvat credit on capital goods, inputs and input services by posting it in the cenvat register while exemption applies, but cannot utilise that credit for payment of excise duty until the exemption ends; when turnover exceeds the SSI threshold and duty is chargeable, previously availed credit, including on capital goods, may be utilised against excise liability.