Sale of machinery on which cenvat has been claimed

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Anubhav Mittal (Querist)
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24 October 2013 Hi, Please resolve my doubt..we had purchased machine on high seas sale and paid custom duty on that. We give this machine on rental basis to various companies and charge service tax.We have also availed the CENVAT, i.e custom duty paid adjusted against service tax liability in last three financial years. now we wish to sell of the machine, please clarify what is the CENVAT implication for sale and can CENVAT benefit be transferred to the buyer.

Sumit Grover

Sumit Grover (Expert)
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24 October 2013 Assuming that machinery mentioned by you falls under the definition of capital goods as per Rule 2(a) of CENVAT Credit Rules, 2004.

Accordingly,as per Rule 3(5A)(a) of CENVAT Credit Rules, 2004,you need to pay an amount equal to higher of following:

1) CENVAT availed less reveral of CENVAT @2.5% per quarter fromm the date of availment of CENVAT.

OR

2)Duty leviable on transaction value.

You may refer Notification 12/2013-CE, dated 27-Sep-2013 for the same.

Anubhav Mittal

Anubhav Mittal (Querist)
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24 October 2013 Thanks a lot Sumit. The reversal @2.5% you mentioned shall be done from the date of availment till the date of sale? How this is done...and how much duty is leviable on value

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