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Inter unit transfer of capital goods

Ram kr. (Buisness) (883 Points)

04 September 2014

Dear Experts, We have purchased some machine under EPCG scheme hence there is no cenvat credit available on that. Now, we want to remove these capital goods our other unit. Whether excise duty is applicable under rule 3(5) or 3(5)a on these capital goods. Please advice. Thanks&Regards

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7 Replies

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 09 September 2014

No. Excise duty not applicable on it if you removed it as such, as we need to charge excise duty under rule 3(5a) and rule 3(5) is purely based on amount of cenvat credit taken on the same and usage period of particular asset. Since, no credit available for clearance of assets against EPCG, no need to charge excise duty under Rule 3(5a).

Thanks and Regards,

Manoj B. Gavali

Ram kr. (Buisness) (883 Points)
Replied 11 September 2014

In which condition we have to pay excise duty on transaction value.

Thanks

CA. sanjeet Kumar Ojha (Chartered Accountant) (272 Points)
Replied 12 September 2014

Follwing conditions must be satisfied:-

(a) There should be sale of goods.

(b) The goods sold should be for delivery at the time and place of removal.

(d) The price should be sole consideration for the sale.

Ram kr. (Buisness) (883 Points)
Replied 13 September 2014

I mean under rule 3(5)a transaction value.

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 15 September 2014

Only when you are selling capital as waste or scrap, excise duty will have to calculated on transaction value.

Ram kr. (Buisness) (883 Points)
Replied 15 September 2014

Whether we will charge excise duty when we have removed capital good as such after 10 years. We have availed cenvat credit on this machine before 10 years.

Ram kr. (Buisness) (883 Points)
Replied 15 September 2014

Whether we will charge excise duty when we have removed capital good as such after 10 years. We have availed cenvat credit on this machine before 10 years.