Cenvat credit issue

[SNEHAL SHAH]

R/sir,

We are Engineering manufacturing company , we have take a permission from Central excise for raw material , Semi-finished goods and finished Goods stores outside factory premises.

Central Excise department impose one condition that U can not take cenvat credit untill all material not received back your Excise registered premises or consumed.

We have SAP System and untill we can not entry in SAP cenvat Accounts department not payment to vender .

So we have one option that we can take cenvat in suspense account ( Cenvat receivable ) and payment to party . If all material received back in our premises or utilise we can JV entry and take cenvat .

In the year end if any balance suspense account balance we can show in balance sheet Asset side ( NOT CENVAT CREDIT AMOUNT ) .

Now my question is that all above transaction is as per excise law or excise permission is ok or not ?

Please guide to us .

With regards,

SNEHAL SHAH

[YAGAY andSUN]

Well, if you show the suspense account balance in current assest then it would treated that you have availed the CENVAT credit.  Please discuss it with your jurisdictional C.E. Authority.

AI Summary

Cenvat credit: treating suspense-account entries as availed credit before goods return risks noncompliance; consult excise authority. The permission conditions bar availing Cenvat credit until materials kept outside the registered premises are returned or consumed; recording credit in a suspense account and showing that balance as a current asset would be treated as availing the credit and risk noncompliance. The advised course is to seek formal clarification from the jurisdictional excise authority before recognising such entries as Cenvat credit.