A manufacture of the final product can remove inputs on which cenvat credit has been taken , as such from the factory if HE POSTS AN AMOUNT EQUAL TO CREDIT AVAILED IN RESPECT OF SUCH INPUTS AND SUCH REMOVAL IS MADE UNDER COVER OF AN INVOICE. what does this mean?
A manufacturer has already paid the duty/tax when invoice is received, then why again he has to pay an amount equal to credit availed?? Wouldn't it be like paying tax twice??
A manufacturer can avail CENVAT credit on inputs USED in manufacture of excisible goods. If inputs are not used but removed as such ( eg. Sale of raw materials), you are required to reverse such credit availed earlier. In other words, you shall forgo the benefit of credit. To that extent, your duty liability shall increase or c/f credits shall decrease, as the case may be.
CAclubindia
