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Cenvat credit availment in respect of spares

anup (Trainee) (30 Points)

23 November 2011

One unit which has been separately registered under excise act purchases stores and spares in respect of other units which are subsquently sent to various other units for consumption which are also separately registered. All units are under the same Company but registration under excise act is separate in all units. If cenvat credit needs to be availed on such spares then can it be claimed by purchasing unit or consumption unit and if it is to be consumed by consumption unit then what records needs to be maintained by purchasing and consumption units both

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2 Replies

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 23 November 2011

Stores unit and consumption unit are come under one unit. It means both the units are sisiter concern for the one main unit.

It it is yes, you can raise the invoice as STOCK TRANSFER with 110% of cost addition,. You can pay duty through stock transfer invoice and take the same at another unit which you can billed.

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Sanjay Gujar (Manager-SCM) (55 Points)
Replied 23 November 2011

Purchasing unit should maintain record for receipt, issue/consumption & balance qty. of inputs / capital goods.

Purchase unit can clear the capital goods to his sister unit, by raising its own invoice with duty payable equal to credit taken, if it is cleared as such before installation. If the capital goods it cleared after installation / use, then duty payable equal to credit taken less abatement @ 2.5% per quarter.

On receipt of capital goods, purchasing unit to claim 50% credit & balance 50% in next financial year. If the capital goods is to be cleared in the same year of receipt, then on the same day of clearance, balance 50% cenvat credit should be taken.