Reversal of Cenvat credit

[madhavvan n]

a manufacturer imports inputs and capital goods and on receipt avails cenvat credit on them of cvd and cess, and then he sends them for storage in factory premises. immediately after 2 days he exports the inputs and capital goods from the storage area as it is free of cost, after executing a bond. is the manufacturer required to reverse the cenvat credit availed on those inputs and capital goods.

[Rama Krishana]

In my belief the same may not constitute as valid export since the proof of export would not be complete without accompanying the proof the foreign realization certificate - But since the manufacturer is exporting the goods free of cost, you need to ascertain only one thing that no question on the validity of export is being raised by the department. If the export is accepted, there would not be any requirement of reversing cenvat credit.

AI Summary

Manufacturer Exports Goods Free of Cost; No Need to Reverse Cenvat Credit if Export Validity Accepted by Department A manufacturer imports inputs and capital goods, avails Cenvat credit on them, and stores them in the factory. Two days later, these goods are exported free of cost after executing a bond. The query concerns whether the manufacturer must reverse the Cenvat credit. The response suggests that if the export is accepted by the department without issues regarding its validity, there is no need to reverse the Cenvat credit. However, the proof of export must be complete, typically requiring a foreign realization certificate.