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Cenvat credit availed in Feb 2016 against capital goods invoice dated 08/2014, Central Excise

Issue Id: - 111618
Dated: 14-3-2017
By:- Kuldeep Kapoor
Cenvat credit availed in Feb 2016 against capital goods invoice dated 08/2014

  • Contents

Due to oversight Capital goods invoice of year 08/2014 was misplaced and found in Feburary 2016 and and entry in RG 23 C -Part II made in Feburary 2014 . I already had cenvat of approximately 3 crore in books in Feburary 2016 and this was not utilized.

Please wether i should reverse the Cenvat amount in March 2017

Posts / Replies

Showing Replies 1 to 14 of 14 Records

1 Dated: 14-3-2017
By:- Himansu Sha


As per clarifications issued vide Circular No. 990/14/2014-CX-8 Dated 19.11.14 issued from F.No 267/72/2013-CX.8 (Pt), it appears that the conditions of one year is also applicable for the capital goods. If we read Rule 4(1) (third proviso) and 4(7) (sixth proviso) of CCR 2004 in isolation it will appear that the limitation is not applicable. But the words Cenvat Credit (stress given) in the said sub rules show the intention of the law makers. Had it been for inputs and input services they must have mentioned specifically.

For your consideration.


2 Dated: 14-3-2017

Dear Querist,

Not required to reverse the credit taken on capital goods in Feb.,16. You have availed the whole credit prior to expiry of second financial year. Assessee can take full credit in second year, if he does not take credit on capital goods in first year.You have qualified the condition of Rule 4 (2) (a) of the Credit Rules inasmuch as 'NIL' credit taken in first financial year, does not exceed 50%. There are so many case laws to strengthen this view. You have not committed an offence by not taking credit in first financial year.

3 Dated: 14-3-2017

It will totally depend on the accounting treatment which had been provided while capitalization of capital goods. If the capital goods are capitalized along with the amount of CENVAT credit and you had availed depreciation on such amount in the 2014 and 2015 then you would not be able to avail the CENVAT credit. Further, it is not understood by us that if Invoice was found in Feb 2016 then how can it be entered in Feb 2014. It seems that there is some typo error in your query.

Please check facts.

4 Dated: 14-3-2017
By:- Himansu Sha

There appears a typographical error in the body of the text when the heading reflect the date of availment is Feb,16. Kasturi sir is correct,but after the amendment there is an anomaly. The circular tells when the entry is made in the register, then for subsequent amounts there is no bar. When the availment is not made even for a nil amount, it appears, the limitation of one year is applicable when the entire entry is made after two years.

5 Dated: 14-3-2017

6 Dated: 14-3-2017

We are sharing with you a latest judgement which is in your favour. But also please check the facts on the accounting treatment on capitalisation of capital goods with or with out CENVAT credit to avoid any unwarranted situation which may occur in near future.

2017 (1) TMI 593 - CESTAT MUMBAI Precision Metal Products Pvt Ltd Vs CCE

7 Dated: 15-3-2017

Dear Sh.Himansu Sha Ji,. Circulars have no statutory force. I have seen Board backtracks whenever there is a hullabaloo by the trade or any Court settles the dust. Whenever there is not clarity in law we resort to judgements. Sometimes case laws are conflicting on the same issue. So an assessee has to be cautious while following any judgement.

Your participation is valuable as we learn from each other.

8 Dated: 15-3-2017
By:- Himansu Sha

There appears no decision of the honourable tribunals after the amendmentsinCCR . Sir with due regard to your views with humility I differ. After all the decisions are for the prior periods. Though Board has clarified basing upon the apex court decision that the circulars are not binding upon the afj. Authority, the department is bound by the circulars.

Kindly do not take it otherwise. My understandings on the issue just placed.

9 Dated: 15-3-2017

Sh.Himansu Shaw Ji,. Difference of opinion is not bad. It leads to better results.

10 Dated: 15-3-2017
By:- Himansu Sha

Thank you sir

11 Dated: 15-3-2017

Sh.Himansu Sha Ji,

You have not uploaded your profile on TMI. I am interested. Will you do so ?

12 Dated: 15-3-2017

Law develops when it is discussed.angel

13 Dated: 16-3-2017

Yes Sir.

14 Dated: 17-3-2017


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