Removal of Credit availed inputs/capital goods (Rule 3(5) of the CCR): - Central Excise Practice Manual (OLD) - Central Excise

6. Removal of Credit availed inputs/capital goods (Rule 3(5) of the CCR): When inputs or capital goods on which Cenvat credit has been taken are removed as such from the factory or premises of the provider of output service, the manufacturer of the final products or provider of output service as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or Capital goods. However, such payment is not required where the inputs or capital goods are removed outside the premises of the provider of output service for providing the output service. If the Cenvat credit availed Capital goods are removed after being used, an amount equal to the Cenvat credit taken on the said capital goods reduced by 2.5% for each quarter of a year or part thereof from the date of taking Cenvat credit is to be paid. If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on the transaction value. If the value of any credit availed input or capital goods, before being put to use, is written off fully or where any provision to write off fully has been made in the books of account, then the manufacturer shall pay an amount equivalent to the Cenvat credit taken in respect of the said input or capital goods. However, re-credit of the same would be allowed, if such inputs or capital goods are subsequently used in the manufacture of final products. In case of remission of duty under Rule 21 on any final products, Cenvat credit taken on the inputs used in the manufacture of such final products is to be reversed. The credit availed inputs or capital goods can be cleared as such for export under bond.