Q.5) As per Rule 11 of CCR,2004 (inserted in FA,2007) Revers

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This query is : Resolved

CA Anand Sarda (Querist)

18 June 2008 Q.5) As per Rule 11 of CCR,2004 (inserted in FA,2007) Reversal of credit taken on inputs, which
are still lying in the stock, or in process or in final product lying in the stock, when final product
becomes exempt from duty subsequently.,, The amount remained in cenvat credit a/c. after reversing
the said amount shall lapse? IS this True.??

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)

19 June 2008 true, following is the text of clause 11(2):

A manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been taking CENVAT credit on inputs or input services before such option is exercised, shall be required to pay an amount equivalent to the CENVAT credit, if any, allowed to him in respect of inputs lying in stock or in process or contained in final products lying in stock on the date when such option is exercised and after deducting the said amount from the balance, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export.

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