Cnevat of AED paid on Capital Goods

[Vinay Kunte]

Is 100% Cenvat Credit of AED Paid @4% on imported capital goods allowed in the first year? If yes, under which provision?

Can the experts put some light on the issue which is being raised under the EA 2k Audit now underway from FY 2015-16 onwards?

AI Summary

Experts Confirm 100% Cenvat Credit on 4% AED for Imported Capital Goods Permissible in First Year Under Rule 4. A discussion forum addresses the eligibility of 100% Cenvat Credit on Additional Duty of Customs (AED) paid at 4% on imported capital goods in the first year. The inquiry seeks clarity on the applicable provisions under the Cenvat Credit Rules, 2004. Participants, including experts, discuss relevant legal provisions, case law, and government budget bulletins. They confirm that 100% credit is permissible in the first year under Rule 4, and additional duty credit can only be used for excise duty payments. The discussion also includes appreciation for contributions and suggestions for writing books on the subject.