Cenvat credit on p&m under erection

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A Ltd has purchased "Vacumm Circuit Breaker" for Rs 5,41,995/- from B Ltd.

B Ltd charged excise duty @ 10.30% i.e. Rs 55,826/-

Now A Ltd has passed entry in its books of Accounts as follws:

P&M under erection A/c ...Dr    Rs 541995
P&M under erection A/c ...Dr    Rs  55826
To B Ltd               ...Cr    Rs 597821

My question is, whether above entry is correct.

Can't A Ltd take cenvat credit of Rs 55826.

Replies (2)
Ya, you can take cenvat credit and better to debit "cenvat credit-excise duty" a/c instead of p&m erection a/c .
Dear Sir,
Entry should be as below
P&M under erection A/c .....................Dr Rs 541995
Cenvat on Capital Goods A/c ...............Dr Rs 27913
Deffered Cenvat on Capital Goods A/C...Dr. Rs. 27913
To B Ltd ....................................................................Cr Rs 597821
(Only 50% Cenvat is allowed on capital goods in the year of purchase)
 

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