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

Cenvat credit transfer limited: excess unutilised input credit generally not transferable except where registered as LTU.
Whether an excess Cenvat Credit arising because input credit (including additional duty) exceeds excise liability can be utilised at a second manufacturing unit is contested; advisers direct attention to the limits on inter unit transfer under the Cenvat Credit Rules, note an exception for registration as a LTU, and recommend considering refund or adjustment procedures while anticipating departmental queries about any inflated duty structure.