Payment of duty on clearance of machinary

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..... Payment of duty on clearance of machinary
Query (Issue) Started By: - raj kumar shukla Dated:- 4-1-2012 Last Reply Date:- 6-1-2012 Central Excise
Got 6 Replies
Central Excise
Dear sirs, In case of clearance of cenvatted old and used machinary after 10years i.e. after its depreciated value becomes zero ,how the cenvat is to be reversed and invoice prepared.As per rule 3 (5A) ,if the c .....

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..... apital goods are cleared as waste and scrap, amount equal to duty leviable on transactional value is to be paid. Is invoice to be prepared showing it as waste and scrap or wornout machinary? Reply By Rahul Sonawane: The Reply: Dear Raj, If you are clearing the capital goods as such than you need to reduce the cenvat availed, by 2.5% per quarter from the date of receipt/Installation of Machine, .....

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..... and if you are selling the Machine as a waste & scrap you need to pay the duty on Transaction value. Reply By raj kumar shukla: The Reply: I have already specified that the machinary is 10 years old.meaning thereby after reducing it by 2.5% per quarter, it becomes zero. How the cenvat is to be reversed.? normally no credit would be required to be reversed. However if examined in light of above m .....

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..... entioned rule, amount is to be paid. How the invoice is to be prepared. will it be waste and scrap or will it be machinary which has worn out? Reply By Rahul Sonawane: The Reply: Dear Sir, That is what i have mentione below , how to prepare Invoice is depends on, what you going to sell whether as a Machine or as a scrap. Reply By Pradeep Khatri: The Reply: If the machine is in the working con .....

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..... dition and your customs will use it for manufacturing of final product, then, there is no need to pay duty on the transaction value since the Rule 3 (5A) comes into the picture if the machine is being removed as waste and scrap. Further, you must mention on the invoice that machine is more than 10 years old and is in working condition. One more precaution you would have to take that machine shoul .....

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..... d not be dismantled. Reply By raj kumar shukla: The Reply: DOES THAT MEAN DUTY IS DEPENDENT OF PROFILE OF CUSTOMER/END USE? Reply By Pradeep Khatri: The Reply: Yes, if the machine is capable to manufacture final products then there is no requirement to pay the duty on the transaction value as the machine has not been scrapped.
Discussion Forum - Knowledge Sharing .....

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