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

Export validity and Cenvat credit: acceptance of export proof determines whether credit reversal is required. Whether Cenvat credit availed on inputs and capital goods removed from factory storage and exported free of charge must be reversed depends on the sufficiency of export proof and departmental acceptance; if export formalities and proof of realization are accepted, reversal is not required.