FMS Scheme

[Sanjay Sharma]

Dear Experts,

As per the notification no. 30/2012-Central Excise Tariff, we understand that we can procure the excisable goods from the domestic market without payment of Excise duty by using the Focus Market scheme duty credit scrip but, there is a confusion about the utilization of the said FMS for the Excise duty payment on finish goods.

In other words,  can we adjust our Excise duty liability on final product against the said FMS rather tan paying the said excise duty by cash or by cenvat credit & if the case is like this then what would be the mechanism to utilize the FMS as there is no change in the form ER-1 yet to taking the effect of this notification?. pls. provide your experts advise in this.

Regards

Sanjay Sharma

[Sanjay Sharma]

If any one can enlighten us in this matter pls.

Regards

Sanjay Sharma

[Alok Kumar]

Dear Mr. Sanjay Sharma,

In terms of para"J" of the above quoted central excise notification you will be entiltled to the cenvat credit of the central excise duty element debited in the scrip.

Once the duty of central excise is debited on the reverse of the scrip you can claim the same in your records.

In the similar way the credit will be taken in your ER-1/ER- 3 RETURN respectively too . when the goods are sourced from manufatcturers then you can show it as goods received from manufcaturers or CENVAT claimed agst. manufacturers .

thanks,

warm regards,

alok kumar

[Alok Kumar]

Dear Mr. sanjay,

Once you justify the said  sourced goods to be your inputs / capital goods you can ser off the said cenvat credit agst your central excise duty liablity of your final excisable goods.

 

thanks,

Alok Kumar

AI Summary

CENVAT credit from FMS duty credit scrips can be used to offset central excise liability on final products.
Paragraph J of the notification allows cenvat credit of the central excise duty element debited in an FMS duty credit scrip; once that duty is debited on the reverse of the scrip the recipient may claim the cenvat credit in accounts, reflect it in ER-1/ER-3 returns, and, if the sourced goods qualify as inputs or capital goods, set off the credit against central excise liability on final excisable goods.