Charging excise duty on capital goods sale

[Mridul Sethi]

Procedure for removal of capital goods for One plant to another with regards to excise duty. In this case duty will be reversed at Old rate(at the time of purchase) or at existing rate?

Mridul Sethi

[YAGAY and SUN]

CENVAT credit would be reversed after deduction of 2.5% of duty per quarter if you are removing Capital goods from your one unit to another unit.

[Mridul Sethi]

Sir, Pls let me clear that:-

1. Will Excise Duty will charged @ prevalent rate at the time of removal or

2. Will we reverse the duty as in case of Input removal.

Also pls make it clear by an exp. that a company has make decision to sale a machinary @ Rs.2 lac & its purchase price is Basic Rs.5 Lac & it is purchased 4 years before. How to calculated excise duty. Is it 10.3% on Rs.2 Lac or on 5 lac minus 40%(2.5%x4qtr.x4years)....Mridul

AI Summary

CENVAT credit reversal on intra company capital goods transfers applies a pro rata quarterly deduction determining duty adjustment.
The operative response advises that CENVAT credit must be reversed when capital goods are removed between units, applying a pro rata quarterly deduction from the original credit for each quarter of use; this reversal mechanism, rather than charging excise at the current removal rate, governs the adjustment of credit as illustrated by the enquirer's example.