Reversal of cenvat credit - registration surrendered

[kiran kujur]

I have surrendered my C.Ex. Registration Certificate but there are cap. goods still installed in the factory and 50% of the credit of the same has been utilized for payment of duty on finished goods. Is it mandatory in terms of cenvat credit rules 2004 to reverse the credit/ pay an amount equal to credit taken in cash as we are not in a position to use the cap. goods for manufacturing activity. since there is no physical removal of the cap. goods from the factory but Revenue asked us to reverse the credit because it will be deemed removal on the date of surrendering of R.C. and without reversal of the same, surrendering of R.C will not be accepted by the Revenue. Pl make reference of some Judgments as we do not want to reverse/ pay the credit. Is reversal of credit is applicable of stock on inputs unutilized on the date of Surrendering of R.c

[Rama Krishana]

No, once the capital goods are brought into factory premises, credit availed as per the provisions of cenvat credit rules, 2004, at the time of availing cenvat credit you were manufacturing excisable goods and such capital goods were eligible capital goods, there is no provision in the Cenvat Credit Rules, 2004 to reverse the credit on mere surrender of excise registrtion certificate. The action of the revene is not correct. There is no deeming provision in central excise or cenvat credit that on the date of surrender of excise registration the machinery shall be treated as removed.

AI Summary

Reversing Cenvat Credit Not Required When Surrendering Excise Registration if Capital Goods Stay Installed per Cenvat Credit Rules, 2004. A discussion on a forum addresses whether cenvat credit must be reversed upon surrendering a Central Excise Registration Certificate while capital goods remain installed in a factory. The original poster questions if reversal is necessary since the goods are not physically removed, but the Revenue demands reversal, treating it as deemed removal. The respondent clarifies that under the Cenvat Credit Rules, 2004, there is no requirement to reverse credit merely due to the surrender of the registration certificate, as there is no provision deeming machinery removed on the surrender date.