Cenvat credit - reg.

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Debas Maji

Jr. Exe

55 Points Joined October 2012

Sir,

Our plant is an integrated steel plant along with Captive Power Plant for reformation of its sponge iron plant by adding new induction furnace and captive power plant, sinter plant, SMS. During reformation of our plant, we have manufactured some components / parts of our power plant and steel plant like Stock Bunker, Slag Crusher Banker, PAN Banker, Conveyor Line, Ground Hopper, in our factory premises and submitted Chartered Engineers’ Certificate in respect of the above manufacturing item by using Angle, Channel, H.R. Coil, Plate, Joist, and availed CENVAT credit on this respective inputs.

Central Excise audit put on objection by a spot memo it has been alleged that LPG and Construction materials like H.R.Coil, Angle, Channel, Plate, Joist, which CENVAT credit has been availed is irregular and not admissible as per provision of CENVAT Credit Rules’2004 and suggested to pay back / reverse the inadmissible credit with interest.

My question is that whether we can avail CENVAT credit or Not ?

Please let us have your valuable opinion in this matter.

Replies (4)

Anandan

HOD accounts

502 Points Joined June 2012

@ Debas, The excise department is correct. Cenvat credit of only inputs\ services used for manufacturing activity of your final products , can be used to set off the excise duty laibility on your sales of final mfg products. The cenvat you have availed is for construting of plant and machine; factory etc, hence rejected.

Hope the matter is clear.

Regards

Anandan.s

DAYANANDA K N

ACCOUNTS EXCECUTIVE

575 Points Joined February 2010

As per the current defination of Input under Rule 2 (k) any goods used for

(a) construction of a building or a civil structure or a part thereof; or

(b) laying of foundation or making of structures for support of capital goods,

are not eiligible for input credit. If goods you are discussing falls in the above category than department is right in disallowing the credit. As far as LPG is concerened eligibility depends on purpose of use.

Regards

Dayananda

satya

Executive Excise

1839 Points Joined January 2008

Dear Debas,

If u fabricated any Capital Goods with Angles, Channels, H.R. Coils, M.S.Plates, Joists after submitting Chartered Engineer certificate , then u are eligible to take Cenvat Credit on the above item.

where as I thisnk they have been utilised for construction or supporting structure to Capital goods , it is not eligible.