DEPB and Cenvat Credit on sale of Second Machinery

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Rashi (Querist)
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20 November 2008 Company has availed cenvat credit on Machinery which manufactures exempted goods.The company has not utilised the said credit till date.

Now the company wants to export the said machinery.Can teh company export the same against DEPB. If not than can the company claim the refund of cenvat credit of machinery not utilised till date

ravi

ravi (Expert)
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21 November 2008 i think u can export get DEPB claim, but the 2nd option (i.e. refund of cenvat credit) is not possible, becuase

Rule 5. Refund of CENVAT credit.- Where any inputs are used in the final products which are cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification:

Provided that no refund of credit shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty.

Arbind Aggarwal

Arbind Aggarwal (Expert)
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22 November 2008 First whether it was an imported machine or domestically purchased?

If imported then duty drawback u/s 74 will be available subject to time limits as applicable.

It is better u reverse the credit taken and claim DEPB if it is an domestic machine.

Refund of credit may also be available.
Your question is not clear hence can not be clarified in specific terms

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