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Material removed w/o duty payment
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....aterial removed w/o duty payment<br> Query (Issue) Started By: - SNEHAL SHAH Dated:- 13-1-2011 Last Reply Date:- 15-1-2011 Central Excise<br>Got 4 Replies<br>Central Excise<br>R/sir, We have purchase Machinery on payment of duty but we have not taken credit on this due to misplace of invoice or elseware .After using this machine 5 years we had sale w/o payment of duty on ground that we had not ta....
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....ken credit on this . Please guide this is correct or not . Regards, SNEHAL SHAH Reply By Mangesh Lokre: The Reply: Please note, according to the Rule 3(5) of Cenvat Credit Rules 2004, "if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer or provider of output service shall pay an amount equal to the CENVAT Credit taken on the said capital go....
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....ods reduced by 2.5 per cent for each quarter of a year or part thereof from the date of taking the Cenvat Credit;". Since you have not avail the Cenvat Credit, you cannt use this formula for payment of duty. But have to remember that, excisable goods to be clear on payment of duty only. 1. Either Take the Credit and remove as such 2. Or Declare machinery as Scrap and Pay the Duty on transacti....
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....on value. Note that merely saying that you are not eligible for payment of duty as you have not avail the Cenvat Credit is not sufficient. ED to paid on removal of excisable goods. Reply By Mangesh Lokre: The Reply: Please note, according to the Rule 3(5) of Cenvat Credit Rules 2004, "if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer o....
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....r provider of output service shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by 2.5 per cent for each quarter of a year or part thereof from the date of taking the Cenvat Credit;". Since you have not avail the Cenvat Credit, you cannt use this formula for payment of duty. But have to remember that, excisable goods to be clear on payment of duty only. 1. E....
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....ither Take the Credit and remove as such 2. Or Declare machinery as Scrap and Pay the Duty on transaction value. Note that merely saying that you are not eligible for payment of duty as you have not avail the Cenvat Credit is not sufficient. ED to paid on removal of excisable goods. Reply By RB SINGH: The Reply: I have seen the reply of Mr.Mangesh Lokre, in response to your query, but I wish t....
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....o differ with him. Rule 3(5) of Cenvat Credit Rules 2004, do not come into play in your case since you have not availed the credit on the capital goods at the time of its receipt. Reversal of credit is required only when the credit has been availed and or utilized. In my view you are correct. Reply By Mangesh Lokre: The Reply: Mr Singh I agree with your contention. But please note that you hav....
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....e to clear the goods on payment of duty only irrespective availment of cenvat credit. Since the credit is not availed the provision of Rule3(5) doesnt attract to the present case. But still payment of duty is in question. It is again advisable to pay the duty at the time of removal in order to avoid litigation.<br> Discussion Forum - Knowledge Sharing ....