Availment of cenvat credit and payment of duty

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 February 2014
a company has two manufacturing units (A & B)in karnataka, registered under central excise.

company has merged the two units in one place (UNIT A). and applied for surrender of registration of unit B in ist week of March 2013 in ACES and handedover the application to department immediately. But the department processed the application after one month since IAP audit is scheduled in March 2013.

During this transit period, company has raised the supplimentary invoice for the diffrence value arising out of inter unit transfer of goods between two units from each unit.

for the excise duty paid on supplimentary invoice by unit B on Unit A, Unit A availed cenvat credit on the said document.

same exercise is done by Unit B, and showing in ER1 returns showing a cenvat balance.

my query is

whether Unit B can file refund application on the said balance (as this credit is arising on availment of supplimentary invoice raised by Unit A and duty paid on supplimentary invoice raised on Unit A ie transaction is made after surrendering the excise registration)

can any one clarify my doubt

thanks in advance

ram

Arun Kumar Singh

Arun Kumar Singh (Expert)
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06 February 2014 If goods has been exported or excess duty paid then you can get the refund.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

06 February 2014 need some more clarification.

at the time of surrendering registration, unit b has paid all its dues to the department.

unit b availed cenvat credit on supplimentary invoice (on account of CAS4 valuation) of Unit A for Rs. 5,00,000 invoice

unit b utilised the said credit of Rs. 100000 for supplimentary invoice(CAS4 valuation) raised on unit A

net of cenvat Rs.5.00 lakhs - 1.00 lakh ie 4.00 lakhs is shown as cenvat cl balance shown in ER1 returns. IAP audit is also completed in June month itself.

now unit b is in processing of refund claim on closing balance shown in ER1 returns

someone argued that
1) since Unit B is surrendered the registration, availment of credit on invoice of Unit A is wrong and department will not allow, same is tobe reversed with interest

2) unit B has to pay the excise duty payable on Supplimentary invoice thru PLA Payment only (with interest)

please advise whether unit b can get the refund in view of the above argument

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