We had imported machinery for manufacturing of excisable goods, on which we have paid import duty and subsequently availed cenvat credit for the same as per cenvat credit rules, 2004. after 3 years now we want to sell that machinery to SEZ Unit (It means capital goods exported). so what will be the impact on cenvat credit availed earlier, whether it is reversible.
Please reply as early as possible.
Regards,
chirag
Dear Chirag,
First of all the fact that the Capital Goods have been removed to a unit in SEZ has no impact on this..I mean same rule will be followed in case of removal to Domestic Tariff Area (i:e Non SEZ, etc)
Case 1 : CAPITAL GOODS ARE REMOVED AS WASTE/SCRAP
duty equal to transanction value is to be reversed ...........(Rule 5A)
Case 2 : CAPITAL GOODS ARE NOT REMOVED AS WASTE/ SCRAP(I:E IN WORKING CONDITION) AFTER BEING USED
Amount = Cencvat Credit as reuced by 2.5%/quarter or part thereof from the date of credit taken is to be removed...............Provisio to Rule 3(5)
Case 3 : CAPITAL GOODS ARE REMOVED WITHOUT BEING USED
in this case entire credit has to be reversed............. Rule 3(5)
BHUPINDER SHAH AND COMPANY
New Delhi
CA Inter
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A R JADHAV AND ASSOCIATES
Mumbai
CA Inter
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