Applicability of ccr 2004 after surrending certificate

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2013 Dear All

Please help me on the case below

1. we have surrendered our Excise certificate as our product is no longer excisable
2. we have reversed the cenvat taken on goods lying in stock as per rule 11(3)
3. we have some amount yet to recieve from Excise department.
4. The refund is being withheld by department stating that cenvat on capital goods are also to be reversed.
5. My Question Is, on what basis is the cenvat on capital goods be reversed?
6. and if it is on basis on rule3(5) then it is only during removal of capital goods. how do we pay for removal after surrendering?
7. Can Excise department hold the refund amount as security for excise payable for such future removal?

PLease answer with case law or law reference
Requirement is on urgent basis

Arun Kumar Singh

Arun Kumar Singh (Expert)
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04 May 2013 You have taken the cenvat credit on capital goods and after use due to some reason registration has been cancelled then you should reverse the cenvat credit on the basis of 2.5% for each quarter of a year or part thereof from the date of taking the credit.

Querist : Anonymous

Querist : Anonymous (Querist)

06 May 2013 But sir

WE have not physically removed the goods from plant for payment as per 3(5). Should we pay after deducting 2.5% upto date of date of surrender??

I think there is no provision for such payment in act or rules.

Arun Kumar Singh

Arun Kumar Singh (Expert)
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09 May 2013 I agree with you that you had not physically removed the capital goods but you have take the 100% or 50% cenvat credit for the manufacturing of dutiable goods and now you did surrendered your RC. In my view you should reverse the cenvat credit on proportionate way on capital goods also.

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