Sale of Capital Goods on which CENVAT credit availed

[pramod biswal]

What is the implication of Central excise on sale of 5 yr old Capital goods on which company has already availed CENVAT credit on purchase of the same?

EXP:- Book value at the time of purchase - Rs. 50 Lacs

WDV as on end of the 5th year - Rs. 25 Lacs

CENVAT availed- Rs. 5.15 Lacs.

Now Proposed Sales Price - Rs. 28 Lacs

Is it reqd. to reverse the CENVAT credit availed earlier?

Or, is it reqd. to pay ED on sales price?

[YAGAY andSUN]

CENVAT credit is required to be reversed after deducting the depreciate @ 2.5% per quarter from the amount of CENVAT credit availed on such capital goods.  Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to th duty leviable on transaction value.  Rule 3 (5A) of cenvat credit rule, 2004 as subsituted by Notification No. 18/2012-CE(N.T.) dated 17-03-2012.

[pramod biswal]

Thanks Mr. Pradeep 

AI Summary

CENVAT credit reversal required on resale of capital goods; depreciation allowance and transaction value cap determine payable amount. Sale of capital goods previously subject to CENVAT credit requires reversal calculated by deducting depreciation at 2.5% per quarter from the CENVAT credit availed; if that computed amount is less than the duty leviable on the transaction value, the payable amount equals the duty leviable on the transaction value, under Rule 3(5A) of the Cenvat Credit Rules, 2004 as substituted.