Excise on capital goods

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This query is : Resolved

F H G (Querist)

24 February 2010 If we purchase an Fixed Asset we pay ED on it we put 50 % of ED for current year and rest 50 % for subsequent year in this scenario I have the following doubt:-

Q (1) If we use above fixed asset up to it's retirement scrap, then whether it's paid Excise Duty will be cliamable or not.

Q (2) If we sale above fixed asset after two years of purchasing, then whether it's paid Excise Duty will be cliamable or not.

Q (3) If we sale above fixed asset within one year of purchasing, then whether it's paid Excise Duty will be cliamable or not.

Q (4) If paid excise duty is not claimable in case of capital goods (Fixed Asset), then whether should we include it in Fixed Asset value or not.

Thanks & Regards
FAZLE

Vipin Gupta

Vipin Gupta (Expert)

01 March 2010 Dear sir,

1. If you use the fixed assets upto the retirement than no excise duty has to be reversed but if it is sold as scrap or waste then the duty will be paid as per rule 3 (5A) on the transactional value.
2.Then as per rule 3 (5) provisio provide that the cenvat credit will be reduced by 2.5 % for each quarter of a year or part of the year from the date of taking credit.
3.If the fixed assets is sold without being put to use then the duty claimed will be reversed and if it is removed after put to use than point 2 will apply.
4.The paid excise duty will form part of Fixed assets.

F H G

F H G (Querist)

02 March 2010 Thank you Mr Vipin

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