Cenvat credit on goods received free of cost, Central Excise

[shaji thomas]

Whether Cenvat credit can be allowed on the imported goods supplied free of cost against the low grade material supplied initially. Both the consignments are accounted for in the excise records however in the accounts/purchase ledger the free goods has not been accounted for as purchase and the value of this goods not considered for valuation in balance sheet's closing stock. Whether the CVD and SAD paid on the free goods can be allowed as Cenvat credit?

Posts / Replies

[sri srivathsan]

The relevant Factor for taking cevat credit is manufature not the factors like replacement etc

so assesee can take only if its uased in relation to manufacture

[Surender Gupta]

I am in full agreement with the view of Mr. Sri Srivathsan that as long as imported goods have been used in relation to manufacture of excisable goods, you can avail cenvat credit of CVD paid on such goods even though such goods have been received free of cost.