Cenvat on capital goods - Reg

[vinay wakde]

We are receiving various accessories/component of specified capital goods falls under Chapter No. 84, such as Rubber Hose (Ch No. 4009 22 00) used for Hydraulic system, CAF Gasket (Ch.No.6812 93 00), Rubber Diaphragm (Ch No.40) used for various Valves, O-Ring (Ch.No. 4016 93 30) Oil seal (Ch No. 4016 93 00) for Pumps etc.

We are taking 50% CENVAT credit on these items immediately after receipt of the goods in the factory treating as accessories of specified Capital goods (Ch.No. 84)  & balance 50% credit shall be taken in next financial year in terms of Rule 4(2)(b) of CENVAT credit Rules,2004.

At the time of maintenance, if the accessories/components mentioned above are required to be replaced in same financial year. Kindly let us know whether balance 50% credit to be taken in next year against these receipt shall be eligible for us or not.   

Regards,

VINAY

 

 

AI Summary

Cenvat credit timing: whether deferred balance for accessories treated as capital goods can be claimed when replacements occur.
Whether input tax credit on accessories and components treated as capital goods may be claimed in full where 50% credit is taken on receipt and the remaining 50% is deferred to the next financial year, particularly when such accessories are replaced within the same financial year; the discussion records contrasting interpretations of Rule 4(2)(b) of the CENVAT Credit Rules, 2004-one limiting 100% immediate credit to cases where the capital goods are cleared the same year, another allowing full credit for spares and parts qualifying as capital goods, and a practical view advocating an exception for consumables and certain spare components.