CENVAT Credit set off with the 50% Capital Goods Cenvat?

This query is : Resolved

CA. Arul Mozhi Varman (Querist)
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11 July 2009 CENVAT Credit shall be availed 50% during the first year and the balance to be in the subsequent year.

However, if an assessee avails the whole 100% in the first year itself, the dept. shall demand the assesse to pay the 50% Cenvat credit (wrongly) availed and avail the credit in the next year.

In this case, when the dept demand the assesse to pay the 50% Cenvat credit (wrongly) availed, the Assessee is having a surplus of cenvat credit which can set off the 50% capital goods cenvat credit.

Can the Assesse set off that ????

Thanks in advance,
Arul.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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12 July 2009 If the surplus is available trhoug out the period there is no issue at all. The dept cna only ask for interest when there is insufficient balance.