Cenvat credit on Capital Goods, Central Excise

[shaji thomas]

A Company had availed 50% Cenvat Credit on Capital Goods on the first year of procurement when the unit was availing exemption under Notn.8/2003 and has not paid duty during the entire period(period refered is 2006-07). Is it allowed to avail the 50% credit in the first year ie. under exemption or 100 % credit in subsequent years ?

Posts / Replies

[Seetharaman K C]

There is a distinct difference between availament of CENVAT credit and utilisation of the same. In this case the unit can avail the credit on capital goods in the first year upto the extent of 50% and utilise the credit for payment of duty when the unit crosses the turnover limit specified after which the goods become excisable. The balance 50% can be availed in any of the subsequent financial years