Cenvat cedit reversal under rule 6 of CCR 2004/trading reversal

[Yatin Bhopi]

Dear all

We are manufacture and also doing trading activity from same premise, below are my queries related to reversal of cenvat credit under rule 6 of  CCR, 2004,.

1. Is we need to reverse this amount before 5^th of succeeding sale, If we opt for  option to pay @ 6% (rule (ii) 6) i.e. sale price -Cost of goods sold or 10% of cost of goods sold whichever is higher.
2. Is this rules applies In case of goods cleared as such (sale)
3. If yes then in case of inter unit transfer (not sale) of raw material what will be situation?
4. What will be interest rate if we not pay this amount in due date (rate mentioned in rule 6 is 24%   
5. If we reverse the proportionate cenvat credit as per below eg. Is it correct?  Total sale = 10,00,000/- (Normal sale + trading sale) Trading sale 1,50,000/- Total input credit 75000/-

Reversal amount will be 150000/1000000X75000 = 11250/-

Please guide

AI Summary

Manufacturer Seeks Clarification on CENVAT Credit Reversal Under Rule 6; Trading as Exempt Activity Raises Compliance Questions A manufacturer involved in both manufacturing and trading activities sought clarification on the reversal of CENVAT credit under Rule 6 of the CENVAT Credit Rules, 2004. The queries focused on the timing and calculation of the reversal amount, applicability to goods cleared as such, and inter-unit transfers. Additionally, they inquired about the interest rate for late payments. A response highlighted that trading is an exempted activity, necessitating the reversal of proportionate CENVAT credit or payment of an amount, with non-payment leading to statutory interest and potential penalties.