Cenvat on capital goods

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Srinivasa Joshi (Querist)
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16 April 2016 Dear Sir,
We are purchasing a Crusher- Machinery, bill including Excise duty, the same can be utilize and we can adjust the same how many years against payment of service tax. Please clarify the same.
Thanking you
With regards
S. Joshi

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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16 April 2016 CENVAT Credit on capital goods has to be availed in two stages except by SSI. 50% to be availed in first year when goods received and balance 50% in any subsequent years. SSI unit can avail 100% CENVAT in the very first year

Capital goods does not cover equipment or appliances used in office for manufacturer

Rule 2(a)(A)(1) clarify 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.
It is clarified that air conditioner, refrigerator and computer will be eligible if they are used in the manufacture of final product.
Computer though install in office but used for monitoring equipment involved in manufacturing process and movements of goods shall be eligible for CENVAT – Ruchi Health Food V. CCE[2007]

Duty paying documents eligible for CENVAT .
Depreciation under section 32 of income tax act not to be claimed on the excise portion of capital goods- Rule 4[4] of CENVAT Rule,2004,

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