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TMI BlogCaptive consumptionX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts We manufactured one CNC machine made captive consumption without payment of duty under notification No.67/95 , manufactured in the year September 2012, valued at ₹ 7.05 lakhs. We have availed input credit of ₹ 35000.00 (including Cess) During captive consumption we have made the self invoice communicated to Range office with cost accountant certificate Now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are planning to sell the same. Need a clarification, what is the duty to be charge also duty availed on the inputs used to be reverse? Please clarify. - Reply By Ganeshan Kalyani - The Reply = The duty is applicable on transaction value. Thanks. - Reply By KASTURI SETHI - The Reply = I agree with the reply of Sh.Ganeshan Kalyani, Sir. CE law is very much clear. Exemption for captiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consumption under Notification No.67/95-CE dated 16.3.95 as amended is available only if duty is paid or payable on final product. Now after using the machine for more than three years, if machine is to be sold CE duty has to be paid on transaction value as advised by Sh.Ganeshan Kalyani, Sir. - Reply By KASTURI SETHI - The Reply = In continuation of my reply dated 24.6.16, regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reversal input credit, when CE duty has been paid on final product (Machine is final product), the question of reversal credit does not arise. - Reply By Rajagopalan Ranganathan - The Reply = Sir, According to rule 3 (5A) (a) of Cenvat Credit Rules, 2004 - If the capital goods , on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of outp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:- (i) for computers and computer peripherals: for each quarter in the first year @ 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for each quarter in the second year @ 8% for each quarter in the third year @ 5% for each quarter in the fourth and fifth year @ 1% (ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction value, the amount to be paid shall be equal to the duty leviable on transaction value. (b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.] - Reply By KASTURI SETHI - The Reply = Sh.Nanda H.L. Ji, Rule 3 (5A)(a) of Cenvat Credit Rules, 2004 is not applicable here inasmuch the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer did not pay CE duty on CNC machine because of its captive use in the manufacture of dutiable final product for three years. Thus they availed exemption from CE duty on CNC machine under Notification No.67/95-CE dated 16.3.95 as amended. No duty was paid (also mentioned in query), so no question of taking credit at the time of clearance for captive consumption and no question of reversa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l thereof. Needless to say if final product is exempt, exemption is not available under Notification No.67/95-CE dated 16.3.95 as amended. So the appropriate payment of CE duty on transaction value is only the requirement of CE law.. Machine has not become waste and scrap after use of three years only. - Reply By Ganeshan Kalyani - The Reply = Thanks to Sri Kasturi Sir and Sri Rajagopalan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir for submitting your valuable views. Thanks. - Captive consumption - Query Started By: - NANDA H.L. Dated:- 23-6-2016 Central Excise - Got 6 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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