Excise Credit On Capital Goods..

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 June 2011 How to avail the Credit of Excise Duty Paid on goods which falls under the defination of Capital Goods as per Rule 2. Though the same are not Capital Goods for the manufacturer. E.g Goods falling under chapter 82 is Capital Goods as per Rule 2 but the manufacturer is using it as other consumable. Do he has take credit of duty considering same as Capital Goods or he can take credit considering as Raw Material or Other Consumables for further production.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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21 June 2011 Generally its consumable Items we are taking as consumable goods by as per excise we are taking 50% cenvat credit when material received in factory and 50% in next year. but if you will see as per rule its not capital goods. but its not your raw material. so please take 50% cenvat in this year and 50% in next year.

Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2011 Thanks Mr. Ram

But i want one more cllarification -
"but if you will see as per rule its not capital goods".

But all the items falls under the definition of capital goods as per Rule 2 of Excise Rules.

So, we will take 50% Credit in this year & 50% in next year.

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U S Sharma

U S Sharma (Expert)
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25 June 2011 Capital goods are defined in CCR 2004, and capital goods means the goods purchased and used in factory of production, ramain capitalized and is shown in assets at end of year.

if capital goods are used and cleared in finish goods, it can not be taken as capital goods credit but it would be normal input credit.

Capital goods classification List is just to prevent the assessee to take cenvat credit other than the list, while under input credit of Taw Materials there is no such bar to take credit, it cover all such chapters which belong to capital goods also.