Availing cenvat on the premises under construction

[Guest]

We are having Centralised Registration and having 2 plant in running conditions while our 2 plants are under constuction. All these plant are of same nature and output service provided or to be provided are same. At this moment we are taking cenvat credit of all 4 plants while there is no output from our 2 plants (which are under constrcution). Is this right to consument all cenvat credit of plant under construction form plant which are running at 100% capicity.

[Surender Gupta]

Apparently, I see no problem but for the sake of avoiding future problems and inconvenience due to unwarranted litigation, you should not avail the Cenvat Credit in respect of two plants which are under construction. This credit should be accumulated till the plants starts functioning and thereafter, you should utilize this Cenvat Credit.

[Madhukar N Hiregange]

There have been similar cases for alomost a decade in Modvat/ cenvta credit. In my view you are entitled to avail and utilsie the credit.

AI Summary

Cenvat credit entitlement for under construction plant debated; advisory views differ on immediate utilisation versus accumulation until operations commence. Central issue: whether Cenvat credit on inputs and input services attributable to premises under construction may be availed and utilised by other operational units under a single centralised registration. One advisory view recommends against availing such credit until the plants commence functioning to avoid future disputes, advising accumulation. A contrary view relies on established Modvat/Cenvat practice and treats immediate availment and utilisation as permissible, leaving a choice between a risk averse approach and immediate utilisation.