Capital goods depriciation, Central Excise

[yateen vyas]

Sir,

Please define sub rule (4) of Rule 4 of  Cenvat Credit Rule, 2004. Explain it with an example.

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[Pradeep Khatri]

It means that if you avail the CENVAT credit on the Capital Goods then on the amount so availed as CENVAT credit,  you will not charge the Depreciation.

Exihibit:

Cost of the Capital goods (Say Rs. 5000/-)

Excise duty is Rs. 600/-

and if you avail the CENVAT credit of Rs. 600/- then you can't capitalized goods at Rs. 5600/- Hence, you would have to avail the Depreciation on Rs. 5000/-