Whether reversal of Cenvat credit availed is to be done?

Save Share

This query is : Open

Sushant Lohani (Querist)

12 February 2011 XYZ ltd,Lucknow purchased plastic granules valued at 116000(inclusive of taxes) for manu. plastic chairs.It availed Cenvat credit of 16000rs paid on the said input.

How do we treat the following:

Clearance to XYZ ltd's own factory at Jaipur(purchase price:70000) :Free of Cost

a)IS cenvat credit required to be reversed?Why and how much?

b)Had the clearance been of 84000rs;would ur answer been different?

Quote answers with section/rule and their details as well as Court decisions as applicable.

Ram Avtar Singh

Ram Avtar Singh (Expert)

13 February 2011 mater is not clear. what is your business activity. why you can say its your input.

Sushant Lohani

Sushant Lohani (Querist)

13 February 2011 MAking plastic chairs.Plastic granules is an input for making plastic chairs.

Ram Avtar Singh

Ram Avtar Singh (Expert)

13 February 2011 Free sample is lible to excise. now reverse duty.

Sushant Lohani

Sushant Lohani (Querist)

13 February 2011 Sir,how come this be free sample?
The assessee is sending some of the raw materials(on which credit has already been availed) to his another factory?He hasn't given it to another assessee (free or for consideration)

Ram Avtar Singh

Ram Avtar Singh (Expert)

14 February 2011 if you are transfering material to an other factory it meens goods moved and its nature of sale. and duty is lible on sale. so either reversed or pay duty to govt.

Sushant Lohani

Sushant Lohani (Querist)

14 February 2011 So can the assessee again claim credit when he removes chairs from Jaipur factory?