Using the unutilized cenvat of one unit for the payment of other unit

[Rajkumar Chandnani]

We have two units registerd under Excise with XM001 & XM002. We have large unutilised Cenvat credit balance in one unit(XM001). Can we use this to pay excise of other unit(XM002)?

[Surender Gupta]

As such there is no provision for utilizing of cenvat credit of one unit by the another unit. However, you can move inputs / material from one unit to another after reversing the cenvat credit. On that basis, after receiving the material so despatched from one unit, second unit can avail and utilize the cenvat credit. Indeed, the material must be eligible input or capital good for the another unit.

[RadheyShyam Mangal]

no, the cenvat credit is available unitwise and cross utilaisation of excess credit of one unit for payment duty of another unit of same person is not possible.

AI Summary

Cenvat credit cross unit utilisation is not permitted; transfer of inputs with credit reversal allows recipient unit to avail credit. Use of Cenvat credit is unit specific and cannot be directly applied by one unit to meet the excise liability of another unit. An alternative is to transfer inputs or capital goods after reversing the credit at the supplying unit; the receiving unit may then avail and utilize the Cenvat credit if the goods qualify as eligible inputs or capital goods.