Transfer of Capital goods without payment of duty due to change in factroy location

[Amit Apshankar]

Sir,

For transfer of capital goods and raw material  without payment of duty is allowed only on intimation or it is necessary to take permission from Asst/  Dy. Commissioner of Central Excise under Cenvat Credit  Rule -2004sub rule 10.

Amit

 

[YAGAY andSUN]

Kindly refer the sub clause 3 of the Rule 10 in which it is enumerated that concerned authority should be satisfied that goods/capital goods have duly been accounted for, therefore, it is better to seek their permission.

Rule 10.  Transfer of CENVAT credit. - (1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory.

(2) If a provider of output service shifts or transfers his business on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then, the provider of output service shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated business.

(3) The transfer of the CENVAT credit under sub-rules (1) and (2) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise. 

AI Summary

Transfer of CENVAT credit requires transfer and accounting of inputs and capital goods to authority satisfaction. Transfer of CENVAT credit is permitted when a factory or business is shifted or transferred due to change of ownership, sale, merger, amalgamation, lease or transfer to a joint venture, allowing unutilized credit to move to the transferee. This transfer is conditional on the stock of inputs and capital goods being transferred with the factory or business premises and those inputs and capital goods being duly accounted for to the satisfaction of the Deputy Commissioner or Assistant Commissioner of Central Excise; accordingly, obtaining the authority's permission is advisable.