Clarification on issues related to reversal of cenvat credit on WIP/ finished goods written off in the books of accounts -reg.

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..... All Chief Commissioners of Central Excise (including LTU), All Commissioners of Central Excise (including LTU), All Director Generals. Sir/ Madam, Subject: Clarification on issues related to reversal of cenvat credit on WIP/ finished goods written off in the books of accounts -reg. References have been received from field formations stating that as per Rule 3(5B) of CENVAT Credit Rules, 2 .....

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..... ility for payment of tax has been postponed to the time of removal of goods for the factory, but still the legal liability to pay the excise duty has been fastened on the goods, when it has been manufactured or produced. Therefore, normally all goods manufactured suffer excise duty at the time of removal, but if the manufactured goods are destroyed due to natural causes etc., Rule 21 of Central Ex .....

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..... ssed in para2 above would apply. However, if the activity carried out on the WIP goods cannot be considered as amounting to manufacture, in that case, the said goods should be considered as input and the treatment for reversal of credit applicable to input would be applicable. 4. Trade & Industry as well as field formations may be suitably informed. 5. Receipt of this circular may kindly be ac .....

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