TaxTMI 
TaxTMI 
Capital Goods - Cenvat Credit Rules, 2004
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....stoms Tariff Act [SAD] - 100% credit is allowed in the first year itself. 100% credit is allowed in the first year itself where a unit is availing or eligible of SSI exemption [Clearance up to ₹ 4 crores]. 100% credit is allowed in the first year itself where the capital goods are removed as such in the first year itself. On removal of these capital goods, an amount equal to full Cenvat Credit will have to be paid. In case of service provider, actual receipt of capital goods within the registered premises is not necessary. Installation or commissioning of capital goods is not required for taking CENVAT credit. Ownership of capital goods is not essential to avail CENVAT credit. Capital goods obtained on hire purchase/lease/loan eligible. Credit even if hire or lease and license is from non finance company. Credit eligible even if capiatal goods hypothecated to banks. Capital goods can be sent out temporarily. Capital goods should be used in the factory,purpose immaterial. Capital goods eligible even if used for short duration. Partial use of capital goods outside the factory permitted. Credit on capital goods is not available if it is used in another factory - eve....
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....ourier * Motor vehicle designed to carry passengers used for renting or transport or training. * Components, spares and accessories of motor vehicles eligible for cenvat credit and when abatement is not availed. * Service providers can take credit only if original duty paying document or dealer's invoice is available. Capital goods do not cover equipment or appliance used in office for manufacturer Definition clears that equipment or appliances used in an office will not be eligible as capital goods. This restriction is only for manufacturer and not for service provider. Thus if an assessee is both manufacturer as well as service provider, he should be able to avail Cenvat on equipment or appliance used in an office, if they are used for providing output service. Classification cannot be change at the user's end Classification of goods as done by supplier cannot be changed by excise officer having jurisdiction over factory of user who is availing Cenvat credit. Assessee can take full credit in second year, if he does not take any Cenvat credit in first year in relation to capital goods Assessee can choose to take credit in any subsequent year even if he takes nil credit....
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....ts' is classified under chapter heading 9801 for customs purposes. Actually the machinery/goods may be classifiable under different chapter heading as per Central Excise Tariff. It has been clarified that even if imported goods are classifiable under chapter heading 9801 for customs purposes,it will be eligible for Cenvat Credit. It has been clarified that in case of inputs included in project import, full credit of CVD will be available immediately.in case of capital goods, upto 50% is available in current year and balance in subsequent year/years. Provision if capital goods are cleared 'as such' in the first year itself - If the assesse clears capital goods 'as such' in the first year itself, full 100% Cenvat Credit will be available and then while clearing the capital goods, an amount equal to full Cenvat will have to be paid. Rule 3 - CENVAT CREDIT If capital goods are removed as such : The capital goods on which cenvat credit is claimed, if removed, as such, from the factory/premises of service provider, then the manufacturer/ service provider, shall pay an amount equal to cenvat credit availed on such capital goods. Such removal shall be made under the cover of an invoi....
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.... of service in any place other than India and * the unit pays excise duty under section 3 of the Excise Act read with serial number 2 of the notification No. 23/2003-Central Excise, dated the 31st March, 2003, [G.S.R. 266(E), dated the 31st March, 2003], then the cenvat credit allowed shall be calculated as follows : Fifty per cent. of [X multiplied by {(1+BCD/100) multiplied by (CVD/100)}], where BCD and CVD denote ad valorem rates, in per cent., of basic customs duty and additional duty of customs leviable on the inputs or the capital goods respectively and X denotes the assessable value. The CENVAT credit in respect of capital goods cleared on or after the 7 th September, 2009 from an export-oriented undertaking or by a unit in Electronic Hardware Technology Park or in a Software Technology Park, as the case may be, on which such undertaking or unit has paid - * excise duty leviable under section 3 of the Excise Act * the Education Cess and the Secondary and Higher Education cess then the cenvat credit available shall be equal to excise duty equal to additional duty under section 3(1) and under section 3(5) of the customs tariff act and the education cess and higher s....