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Taken the cenvat credit late

Amit Prakash Singh (Accountant) (295 Points)

14 March 2011

Dear All Expert

we have some bill of bill date Jan'09 but we have taken the credit of it in Mar'09 becuse we recd material late (delay by Vendor) but during audit ,it is object by the auditor for it . Now wat we do for it .

Thanx in advance

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8 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 14 March 2011

auditor should not objection on it because cenvat credit if we not took in previous year we can take it after two or three years two…

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 14 March 2011

Originally posted by : Amit Prakash Singh
	Dear All Expert we have some bill of bill date Jan'09 but we have taken the credit of it in Mar'09 becuse we recd material late (delay by Vendor) but during audit ,it is object by the auditor for it . Now wat we do for it . Thanx in advance

there may be many reasons for late credit, viz, late delivery of materials, quality / quantity chek pending, non receipt of invoice/ mismatch of invoice, invoice signature missing of seller ( best point we have used still) , and when corrected we taken credit, auditor can object if we enter the goods at later date and take credit prior to entry of goods entry, for late credit auditor has no valid point to object,

u can protest and ask them to issue show cause, they will step back !!

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Amit Prakash Singh (Accountant) (295 Points)
Replied 14 March 2011

Dear plz find below detail of taken credit is there any wrong we have done plz rply.

Bill Date	Recipt date	Cenvet taken date	Basic	2%	1%

6/1/2009	18/1/2009	1/5/2009	52427	1049	524
6/1/2009	19/3/2009	19/3/2009	30385	608	304
6/1/2009	3/3/2009	3/3/2009	45704	914	457
7/1/2009	13/5/2009	13/5/2009	19716	394	197
7/1/2009	13/5/2009	13/5/2009	21873	437	219
8/1/2009	3/3/2009	3/3/2009	17730	355	177
8/1/2009	03/32009	3/3/2009	18746	375	187
30/7/2009	31/7/2009	1/8/2009	22618	452	226

Pankaj Arora (Learner) (3134 Points)
Replied 14 March 2011

Here nothing is wrong goods may be late because in transit or several reasons..

Divya K S (CA) (289 Points)
Replied 14 March 2011

According to rule 4 of Cenvat Credit Rules 2004, the CENVAT credit on inputs (Capital goods) must be utilised only when the goods arrive into the factory premises. Credit can not be utilised untill the goods are arrived in the factory.

Hence, in this case credit can be utilised only in the month of March 2009.

Dear members, correct me if I am wrong.

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 14 March 2011

Please mentioned the

1)date of receipt of materials in factory, date of posting in RG23A part 1

2) nature of invoice, i.e dealers invoice ( 1st or 2nd stage) / manufacturers invoice

3) mode of transportation of such goods from invoice originating point to your factory

as the dates u have mentioned is ruling around budget day, and change of duty rate taken place on that specific day 28-02-2009. so please re-check carefully the authencity of the invoices, and if possible then post the specific data.

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 15 March 2011

There is not time limit mentioned in cenvat credit rules for availing the credit. Auditor can only enquire reason for the delays but can not deny the credit on the grounds that is taken late.

Find below clarification given in the Central Excise Maual

3.6 CENVAT credit is required to be taken immediately on receipt of inputs in the factory. This, however, does not mean, nor is it even intended that if the manufacturer does not take credit as soon as the inputs are received in the factory, he would be denied the benefit of CENVAT credit such interpretation is not tenable.

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Aashish Padol (EXCISE EXECUTIVE) (206 Points)
Replied 21 March 2011

Originally posted by : DAYANANDA K N
	There is not time limit mentioned in cenvat credit rules for availing the credit. Auditor can only enquire reason for the delays but can not deny the credit on the grounds that is taken late. Find below clarification given in the Central Excise Maual 3.6 CENVAT credit is required to be taken immediately on receipt of inputs in the factory. This, however, does not mean, nor is it even intended that if the manufacturer does not take credit as soon as the inputs are received in the factory, he would be denied the benefit of CENVAT credit such interpretation is not tenable.