Regarding clarification on issues relating to CENVAT Credit Rules 2004

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....p;      The Commissioners of Central Excise and Service Tax (All). Madam/Sir, Sub: Clarification on issues relating to CENVAT Credit Rules 2004- Regarding. The CENVAT Credit Rules 2004 were amended along with the Budget 2011 announcements vide Notification 3/2011-CE (NT) dt 1.3.2011. A few changes were further effected vide Notification 13/2011-CE (NT) dt 31.3.2011. On a few issues trade has requested for clarity. Accordingly the following clarifications are presented issue wise in a tabular format. S.No. Issue Clarification 1 Can credit of capital goods be availed of when used in manufacture of dutiable goods on which benefit under Notification 1/2011- CE is availed or in provision of a serv....

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....ude any goods used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed. 4 Is the credit of input services used for repair or renovation of factory or office available. Credit of input services used for repair or renovation of factory or office is allowed. Services used in relation to renovation or repairs of a factory, p....

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....tion. The method normally followed by the concern for its accounting purpose as per generally accepted accounting principles should be used. 9 Are the taxes and year end discounts to be included in the sale price and cost of goods sold while calculating the value of trading. Generally accepted accounting principles need to be followed in this regard. All taxes for which set off or credit is available or are refundable/ refunded may not be included. Discounts are to be included. 10 Does the expression "in or in relation" used in Rule 6 override the definition of "input" under Rule 2(k) for determining the eligibility of Cenvat credit. The definition of "input" is given in Rule 2(k) and Rule 6 only intends to segregate th....