Transfer of capital good from one factory to other factory

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2012 Company has to transfer one of the machine from one factory unit to other factory.

I would like to know the excise implication on the above transaction..

Thank you.

CA Vijay Kumar Walande

CA Vijay Kumar Walande (Expert)
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21 March 2012 Dear Friend.
The removal of Machine from one factory to another can be in different ways.
1. The Machine can be removed as such i.e., without using it in the factory.
2. The Machine is removed after some use.
3. The Machine is removed to Jobworker.
4. The Machine is removed as waste.

In first case Then the entire cenvat credit availed should be reversed.

In third case No reversal should be done if such Machine is brought back within 180 days.

In Fourth Case The removal should be done after paying duty on Transaction Value.

In Second Case For Machines other than Computers, The amount to be reversed is Total Cenvat availed less No of quarters or part thereof used multiplied by 2.5% of the cenvat availed.

Hope the concept is clear for more information refer rule 3(5) and rule 3(5A) of Cenvat Credit Rules 2004.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2012 Both factory wil be manufacturing goods..

We are transfering some machines which we were using in old factory and it wil be used in new factory for production.

Wil Rule 3(5)/3(5A) or Rule 10- transfer of cenvat credit be applicable in above case.

Thanks

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