Excise implication

[madhavvan n]

CO A had manufactured equipments as per customer B's specificatinos now he has cancelled the order is Co A required to reverse cenvat credit on raw material used for manufacture of those equipment what are the excise implications as Co A will now dismantle the equipment and use it for manufacture of fresh item

AI Summary

No CENVAT credit reversal needed for unused materials unless new goods are excise duty-exempt; consider Rule 6. Company A manufactured equipment according to Customer B's specifications, but the order was canceled. Company A plans to dismantle the equipment and use the materials for new manufacturing. The query concerns whether Company A must reverse the CENVAT credit on the raw materials used. The response clarifies that as long as the goods remain on the factory premises, there is no need to reverse the CENVAT credit. However, if the newly manufactured goods are exempt from excise duty, Company A must reverse the CENVAT credit or apply Rule 6, depending on the situation.