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Plzz explain this

shekhar (student) (257 Points)

30 December 2013

hi frnds plz explain this as i m not able to understand debonding concept in CCR (Excise).

The EOU & units of STP/EHTP are custom bonded & are allowed to procure capital goods without payment of excise duty in their premises for manufacture of export. At the time of DEBONDING they are required to pay excise uty on depriciated value of capital goods at the rate applicable on the date of such debonding.

Rule 3 provides that CCR shall be allowed to be taken of the amount equal to central excise duty pai on capital goods at the time of DEBONDING of EOU or units of STP/EHTP.

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CA KARAN MAINI (Practising CA) (106 Points)
Replied 30 December 2013

Basic concept for allowing CCR is that cenvat credit of excise duty paid on capital goods used in the mfr. of dutiable goods only. There is a famous line regarding allowability of CCR "Neta g Subhash Chander Boss ka motto tha tum muje khoon do me tume aazadi dunga" bas yahi concept ccr par apply hota hai . When goods are removed from 100% EOU to DTA then as per provisio to sec. 3 of CEA 1944.Debonding of CCR means when ecciseable goods are removed from EOU to DTA then exemption given to such EOU withdrawn and duty shall be paid on cap goods used in the mfr. Of local goods.Exemption is allowed to only 100% EOU. But if goods are removed from EOU it ll remain no longer 100% EOU. Duty levied on cap goods shall be paid .