A company has two branches, say A & B. Branch A of a company is purchasing capital goods from Branch B. The Aforesaid capital good is used by Branch A for the purpose providing output service. Branch B manufactures the capital goods and charges excise duty as per Cental Excise Valuation rule 8 (Captive consumption) at 110%. Whether Branch A is eligible to take CENVAT Credit on capital goods ?
Yes. Branch A could avail Cenvat credit to the extent of Edcise duty charged by Branch B on a proper Excise invoice under Rule 11 of Central Excise Rules.
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