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Cenvat cerdit doubt

Ajay Kumar (CA) (279 Points)

14 December 2012

Friends,

Whether SS and MS pipes used inside factory for manufacture of a product can be claimed as input under excise rules. Or will it be a part of Capital structures which are not eligible for input credit.

Thanks.

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nayan (article assistant) (466 Points)
Replied 14 December 2012

In order to remove the cascading effect of excise duty and service tax, the Excise Duty paid on the inputs, capital goods and input services, which are used in or in relation to the manufacture of final product or for providing output services is permissible to be set-off against the excise duty liability on the final products or paying service tax under the CENVAT Credit Rules, 2004. These rules have been notified to regulate the availment and utilization of the CENVAT credit. The salient features are as follows:

I. "CAPITAL GOODS" means

(A) the following goods, namely:—

(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Excise Tariff Act;

(ii) Pollution control equipment;

(iii) Components, spares and accessories of the goods specified and (i) and (ii)

(iv) Moulds and dies, jigs and fixtures;

(v) Refractories and refractory materials;

(vi) Tubes and pipes and fittings thereof; and

(vii) Storage tank.

Used —

1. in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or

1A. outside the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or

2. for providing output service;

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