Capital goods removed after 10 years, Central Excise

[SANDESH SHINDE]

Dear Sir,

Is excise duty payable on capital goods removed after 10 years,if yes pls give us any reference regarding this,pls explain, thanks and regards

Posts / Replies

[Pradeep Khatri]

Dear Sandesh,

Please check Rule 3(5) (5A) (5B) and read with proviso of the CENVAT credit Rules, 2004 as amended from time to time in this regard.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Rajagopalan Ranganathan]

Dear Shri. Shinde,

Please follow rule 3 (5A) of CENVAT Credit Rules, 2004 which is reproduced hereunder: -

(5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-

(i) for computers and computer peripherals:

for each quarter in the first year @ 10%

for each quarter in the second year @ 8%

for each quarter in the third year @ 5%

for each quarter in the fourth and fifth year @ 1%

(ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter:

Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

(b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.]