We are a manufacturer of Excisable goods, say A. We purchase another excisable semi-finihed goods other than our manufactured item, say B, with necessary duty payment. After necessary reprocessing and value addition the same were cleared under authorised documents and on payment of full duty. Our manufactuing facilities doesnot permit us to manufacture the Item B. Are we eligible to take the Cenvat Credit on B under Rule 16 of Central Excise Rule 2002 or under any other Rules. Please advise.
You can avail credit on any goods under rule 16. At the time of removal you have to pay duty/ amount depending on the nature of process undertaken by you.
a. If the goods were subjected to a process not amounting to manufacture, you have to pay an amount equal to the credit taken. This is irrespective of your selling price.
b. If the goods were subjected to a process amounting to manufacture, you have to pay duty on the current value and current rate.
Yes you can avail cenvat credit on Material 'B'
Thanks for your valued response.
Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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