cenvat credit on capital goods

This query is : Resolved

RAM SAINI (Querist)
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19 May 2010 we are manufacturar exporter

we have two plants,one plant has the whole manufacturing process,
second plant is only for doing the job work for the first plant.

second plant does`nt have any sale or job work(job work only for the parent plant)

now we want to close our second plant

we have some cenvat credit of capital goods in our second plant.

now my query is that

what have we to do for transfer the cenvat credit to our first plant

how much credit can we transfer

what will be the procedure

what documents have we to produce for taking the cenvat credit in first plant

pls advice

Thanks & rgds

RK Saini

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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19 May 2010 Dear RK,
No, you can't transfer cenvat credit of one unit to other.
Transfer cenvat credit of one plant to another plant is possible only in case of LTU (Large Taxpayer Unit).

Conditions for becoming an eligible LTU

The following persons who satisfied the following conditions are eligible for opting LTU status: -

(Rule 2(ea) of Central Excise Rules, 2002 , Notification No. 20/2006 CE(NT) dated 30-09-2006, Circular No. 833/10/2006 CE dated 5-10-2006 and Circular No. 834/11/2006 CE dated 5-10-2006 )

The person should -

- have PAN

- be engaged in manufacturing / production of goods or providing services

- be registered under Central Excise or Service Tax

- have paid duties of excise or service tax of more than rupees 5 crores in cash or through PLA in the preceding year of filing of application or during the finance year 2004-2005

- Presently assessed to income tax or corporate tax under the Jurisdiction of CCIT-I, Bangalore (other than revenue district of Tumkur) and CCIT-II of Bangalore (other than district of Kolar)

The following persons are not eligible for LTU status:

- This facility is not available to the manufacturer or producer of goods falling under chapter 24 or Pan Masala falling under chapter 21 of CETA

Other expert's opinion is solicited.

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CA Shiv

CA Shiv (Expert)
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19 May 2010 Bansal SIr,

Cant they transfer the credit to the HO...?

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CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)
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15 June 2010 As per Rule 3(4) of CC rules - CC of the duty, or ST, paid on inputs ,or Input services ,used in mabufacture of final products cleared after availing exemption under notification 32/99 ft 08/07/1000 shall ,respectively , be utilized only for payment of duty on the final products, in respect of which exemption under the said respective notification is availed of.
What does it mean? When the goods are exempted how could the duty be paid on the final products. Does it mean that after the exemption ceases, duty can be utilised for payment of similar Taxable goods in subsequent years