cenvat credit

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..... cenvat credit
Query (Issue) Started By: - vasudevan sudharsanam Dated:- 26-2-2011 Last Reply Date:- 27-2-2011 Central Excise
Got 2 Replies
Central Excise
A company has two units, sugar and distillery. They have been clearing the molasses on payment of duty to distillery unit where denatured ethyl alcohol of dutiable and non dutiable are produced. The assessee have been paying 5% on th .....

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..... e assessable value of non dutiable ethyl alcohol under the provisions of Rule 6(3)(i) of Cenvat Credit Rules, 2004 as they have not been maintaining separate accounts. The credit on molasses gets accumulated. There is a circular by CBEC during 2002 regarding the utilisation of credit taken on molasses which restricts the credit. Now as per Rule 3(4) of CENVAT credit Rules, 2004, the input credit .....

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..... taken may be utilised for payment of duty on any final product. In this case, the molasses is a bye-product of sugar. The question is whether the input credit can be utilised for payment of duty on sugar Is there any case laws? Reply By MARIAPPAN GOVINDARAJAN: The Reply: Dear Sir, You havementioned that dutiable and non dutiable ethyl alcohol are produced. You have also paid 5% of tax on no .....

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..... n dutiable product by giving option to pay service tax @ 5% since you have not maintained separate records for the non dutiable goods. You can avail CENVAT credit against the duty payable on dutiable goods. CENVAT credit can be availed only if there is a nexus between input and the manufacturing of final products. If it could be proved then you can utilise the credit for the payment of duty on sug .....

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..... ar; otherwise not. Regards, M. GOVINDARAJAN 09486103193 Reply By Mangesh Lokre: The Reply: Though the molasses is by product to the Sugar Industry, it is cleared on Payment of Duty. and For Distillary unit, it is a Input. You can avail the Cenvat Credit on such duty paid goods.
Discussion Forum - Knowledge Sharing .....

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