CIR NO.858/16/2007-CX, DT. 08/11/2007
- Document type
- Circular
- Reference no.
- N
- Dated
Clarification regarding Circular No. 845/03/2007-CX dated 01/02/2007
Clarification regarding Circular No. 845/03/2007-CX dated 01/02/2007
2. The matter has been examined. In para-8 of the above- referred Supreme Court decision, it has been held that even when credit is taken, if the entry is reversed before utilization, it would amount to not taking credit. Accordingly, it has been ruled that in such cases, the benefit of the notification cannot be denied. This judgment is given in the context of erstwhile notification No.14/2002-CE, which is similar to notification No. 30/2004-CE dated 9.7.2004. Both the notifications deal with textile articles falling under chapters 50 to 63 of the Central Excise Tariff. Further, all goods falling under Chapters 50 to 63 of the Tariff are covered under rule 6(3)(a) of the CENVAT Credit Rules, 2004, which stipulates that if CENVAT Credit is taken on inputs used in the manufacture of exempted goods falling under these Chapters, then the manufacturer shall reverse the credit so taken.
3. In view of the above, it is clarified that para- 2 of the said circular stands amended to the extent that in case, credit taken on inputs used in the manufacture of the said goods cleared under notification No.14/2002-CE or notification No. 30/2004-CE, has been reversed before utilization, it would amount to credit not having been taken.
4. The field formations may be suitably informed.
5. Hindi version will follow.
Yours faithfully,
(Rahul Nangare)
Under Secretary to the Government of India