Cenvat credit

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A.Barli (Querist)
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29 August 2011 Please explain Rule 3(6) of CCR.

From what i understood-
The assessee can claim cenvat credit on input or CapGoods. Then he pays cenvat under circumstances of 3(5) or 3(5A).

The he himself is eligible for such credit paid under 3(5) or 3(5A) as per rule 3(6).

Is my interpretation correct?

VISHRUT

VISHRUT (Expert)
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29 August 2011 Kindly check following link for all the detailed interpretation.

https://www.caclubindia.com/articles/rule-6-of-cenvat-credit-rules-2004-easy-understanding-5058.asp

A.Barli

A.Barli (Querist)
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30 August 2011 The above post relates to rule 6.
my query is rule 3 subrule 6

U S Sharma

U S Sharma (Expert)
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30 August 2011 assessee claimed input credcit on capital goods Rule 3(1)

once credit is availed, he is liable to pay duty on removal of such capital goods from factory of manufacture under Rule 3(5) or 3(5A)

the next buyer is eligible for input credit of such duty on the strength of invoice issued by assessee.

The assessee himself who have cleared the goods is not at all eligible for credit which is paid under rule 3(5) or 3(5A)

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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30 August 2011 I agree with the experts

A.Barli

A.Barli (Querist)
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30 August 2011 Dear expert,

the rule provides credit to the person who removes the goods.

Is not the manufacturer who removes the goods?

U S Sharma

U S Sharma (Expert)
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31 August 2011 removal means clearance to next buyer on payment of duty under rule 3(5) or 3(5A), in excise terms.

The Manufacturing industry who is owner of the capital goods has to clear the goods to next person on invoice.

Rule does not allow the credit to the "person who is removing the goods" but he is eligible for input credit when the machines were 1st brought to his factory as capital goods. (50% in 1st year and balance in subsequent year)

when he removes the goods, he has to pay the duty, and such duty can not be claimed as input credit by himself,

such duty can be taken as input credit by the person who has taken position of the used capital goods after removal from factory under cover of an invoice and duty paid under rule 3(5) or 3(5A)

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