say mrX of kutch buy goods from mr Y of Ahmedabad with say rs 20 p.u. duty.
now he does value addition & then clear them outside the factory with payment of duty of rs 100 p.u.
they are exempted from duty by notification issued under sec 5A so the OP duty paid by them is refundable as per sec 11B.
and the IP duty credit(RS 20) is also usable by them & if unused they can get refund of the same.
QUESTIONS: 1 AM I CORRECT IN ABOVE? IF YES ISN'T IT DOUBLE BENEFIT?
2 WHAT IF OP ARE EXEMPT FROM DUTY OR TAXABLE AT NIL RATE OF DUTY?
3 WHAT IS ONE TO ONE CORRELATION REQUIRED WITH RESPECT TO THIS UNIT? IS IT MEAN THAT ONE TO ONE UNIT OF PRODUCT OR UNIT OF KUTCH WITH RESPECT TO UNIT OUTSIDE OF KUTCH ARE TO BE SEPARATED?
30 October 2009
KUCH EARTHQUAKE EFFECT AREA HAVING CENTRAL EXCISE EXEMPTION.SO YOU CAN NOT AVAIL CENAVT FACILITY. IN CASE IF YOU CAN NOT OPT EXEMPTION OF KUCH THEN YOU SHOULD PAY EXCISE ON FINAL PRODUCT AND AVAIL CENVAT ON INPUT CREDIT.
30 October 2009
THANKS, BUT THEN WHAT IS 2ND PROVISO TO RULE 3(4) MEANS WHEN IT SAYS THAT "CENVAT CR OF DUTY OR ST PAID ON IP/IPS SHALL BE UTILIZED ONLY FOR PAYMENT OF DUTY ON FINAL PRODUCTS IN RESPECT OF WHICH EXEMPTION IS AVAILED"(i.e. Kutch exemption).So would this mean that as they are not able to take the credit of input against exempted output so that credit needs to be refunded? PLS ANS. 2 & 3 QUE. also.
CAclubindia
