We haveAvailment and utilisation of cenvat credit, Central Excise

[bipad dixit]

We have installed a plant for manufacturing the excisable dutable goods. Now can we avail and utilise the cenvat credit on angle, channels, plate etc.purchase and consumed for construction, erection, foundation of our plant against our duty liability? Please advise me

Posts / Replies

[Rama Krishana]

Material described and purpose for which the same would be used is falling within the meaning of "Input" under rule 2(k) of the Cenvat Credit Rules, 2004. Earlier there was various decisions of different courts allowing cenvat credit on inputs used for construction / erection of foundation of plant or machinery. This rule 2(k) has been amended vide notification no. 16/2009 dated 7-7-2009. After the amendment, there is specific restriction on allowance of credit and therefore, you are not entitled to avail cenvat credit on the impugned items.

[R.S. Mangal]

Kindly refer 2 (k) after its amendment in Budget 2009 Rule 2 (k)Explanation 2.- Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer 7[but shall not include cement, angles, channels, Centrally Twisted Deform bar(CTD) or Thermo Mechanically Treated bar(TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods]; Hence the items cited by u are noy input any more. However there may be possibility of treating them as Capital Goods, but there will be dispute on it and department mat not accept.