Cenvat credit on Goods Purchased from Ist Stage Dealer

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This query is : Resolved

Aman Baranwal (Querist)

29 March 2009 I am Currently engaged in the Audit of a Public limited Company. After Inspection of purchase vouchers, i have seen that old excise Rates @10%/14% are charged by A dealer even if invoice are Raised after Excise Rates are Reduced(24.02.2009) to 8%.
Dealer says that he has purchased these goods before 24th February 2009 therefore he has charged Excise @14%/10%.
In these Scenario Company are Paying excess Excise Duty.
Company can Claim Excess Excise Duty paid as CENVAT CREDIT but Working Capital Requirement of the Company is Increased.

Does the dealer response regarding Excess Ex. Duty is Correct. Please tell me Reasons in this Case.

S. Banerjee

S. Banerjee (Expert)

30 March 2009 Mr. Aman,
A Central Excise Registered Dealer does not pay C. Ex duty like a manufacturer he can pass on the duty as he paid to the manufacturer/first stage dealer. Based on the purchase invoice you can avail the Cenvat credit as mentioned in dealer invoice. If your co is a manufacturer then you are benefited not looser and I do not think that your co's working capital requirement is more.
Thanks, S. Banerjee

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