Transfer of Excess Cenvat Credit

[Sandeep Aggarwal]

Continue with the previous issue, our manufaturing unit has been engaged in assembling which amounts to manufacture. The cenvat credit available on inputs is equivalent to 14%.( including additional duty). Further the excise duty payabe on finished product is 10%. The difference of 4% resulted into excess balance of Cenvat Credit which is lying unutilised in our books as we have trasferred our entire stock / finished goods and proportionate cenvat credit  has been transferred to our second manufaturing unit

We therefor want to utilise this excess balance of cenvat credit in our second unit. The maufacturing operations has already been terminated from Sep, 10.

Kindly advise me whther we can utilise this balance cenvar credit in our second unit.

AI Summary

Manufacturing Unit Queries Cenvat Credit Transfer to Second Unit; Consult Rule 10, Cenvat Credit Rules, 2004 for Guidance. A manufacturing unit faced an issue with excess Cenvat credit due to a higher input duty rate (14%) compared to the excise duty on finished products (10%). The unit transferred its stock and Cenvat credit to a second unit after ceasing operations. The query was whether the excess credit could be utilized in the second unit. A response indicated that transfer is generally not possible unless registered as a Large Taxpayer Unit (LTU). Further suggestions included consulting Rule 10 of the Cenvat Credit Rules, 2004, though the original query noted that their situation differed from typical cases covered by the rule.