Removal of goods "as such"
This query is : Resolved
ANIL ARORA
(Querist)
18 March 2014
We are manufacturer of Industrial Machinery and its spare parts and supplying to various domestic comapanies as well as exporting to various countries.
Our unit has practice to remove some input items "as such" by payment of full excise duty from Cenvat Credit/PLA on enhanced value of input.
Whereas as per Excise Rule we should charge an amount equal to the credit availed in respect of such input sold as such.
Now, Excise Deptt is asking that it is illegal to charge full amount of duty while selling input as such. So we should refund the excess amount charged in our invoice along with interest thereon.
Our stand is that whatever amount has been charged in invoice, is utilized from Cenvat credit/PLA, and if we have to refund the excess amount, we should be allowed to avail the credit of this amount because there cannot be double duty on single sale.
But they are denying for availing the credit of this amount.
Pls advise on the matter.
(Anil Arora)
Manager Finance
Our unit has practice to remove some input items "as such" by payment of full excise duty from Cenvat Credit/PLA on enhanced value of input.
Whereas as per Excise Rule we should charge an amount equal to the credit availed in respect of such input sold as such.
Now, Excise Deptt is asking that it is illegal to charge full amount of duty while selling input as such. So we should refund the excess amount charged in our invoice along with interest thereon.
Our stand is that whatever amount has been charged in invoice, is utilized from Cenvat credit/PLA, and if we have to refund the excess amount, we should be allowed to avail the credit of this amount because there cannot be double duty on single sale.
But they are denying for availing the credit of this amount.
Pls advise on the matter.
(Anil Arora)
Manager Finance
Arun Kumar Singh
(Expert)
18 March 2014
If you have cleared the inputs as such then no value addition should be at the time of sale of inputs. The inputs or capital goods can be removed as such from the factory or manufacturer or premises of service provider on payment of an amount equal to cenvat credit availed when the credit was taken. In other words, it amounts to reversal of cenvat credit taken [rule 3(5)].
ANIL ARORA
(Querist)
18 March 2014
I agree with your reply Mr Arun. It amounts to reversal of credit taken.
We are ready to deposit the excess amount charged in our invoice but Excise Deptt is not giving credit for the amounts which I have already paid from Cenvat Credit. There cannot be double payment of Excise Duty against one time removal of input.
We are ready to deposit the excess amount charged in our invoice but Excise Deptt is not giving credit for the amounts which I have already paid from Cenvat Credit. There cannot be double payment of Excise Duty against one time removal of input.
Arun Kumar Singh
(Expert)
18 March 2014
You should consult with any professional.
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