MODVAT against Import Duty - Claim

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2011 Dear Sir,

We have just started a new import/export company registered in Mumbai.

Our product is ferrous scrap HS(ITC) 72044900

We confirmed the duty structure from the clearing agent as below:
Custom Duty: Nil
Excise: 10%
Edu Cess: 2%
Addl Edu Cess: 1%
Edu Cess: 2%
Addl Edu Cess: 1%
Addl. Excise: 4%

My apprehension is, when I import the same with above duty structure and sell it to the end user (factory), I have to pass on the excise bill and VAT bill.

Can you please let me know, when the user claims the MODVAT, is he able to claim the entire duty structure (i.e. 10+2+1+2+1+4) or is the MODVAT structure reflects something else?

Please advice urgently so that we can plan our import.

Thank you.

Regards,
Krunal
Mumbai

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

15 July 2011 If capital goods on which Cenvat availed are removed as scrap, an ‘amount’ equal to duty on scrap value is payable [Rule 3(5A) of Cenvat Credit Rules].

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 Dear Sir,

As I don't belong to the accounting background and new to impex business, therefore I didn't understand the technical language you have mentioned.

Also there is one more question. In the domestic market it is observed that the excise is 10.3% while there is import the excise is 14.6% approx.
Is the 4% Addl. Excise refundable or is that pertaining to something else?

Your valuable response will help me solve the queries better.

Thank you.

Regards,
Krunal
Mumbai

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

16 July 2011 this is not technical language i am also read in cenvat credit rules.......

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