Circular No. 704/20 /2003-CX
31st March, 2003
Government of India
Ministry of Finance & Company Affairs
Department of Revenue
(Tax Research Unit)
Subject : CENVAT credit involved on stock of Light Diesel Oil as on 28.2.2003- reg.
I am directed to refer to the doubts raised regarding availability of CENVAT credit involved on stock of LDO as on 28.2.2003.
2. In this context, it is mentioned that in the Budget 2003-04, with effect from 1.3.2003, Cenvat credit facility in respect of LDO has been withdrawn. The definition of input in the CENVAT Credit Rules, 2002 has been accordingly amended so as to mean all goods, except LDO, HSD and motor spirit, used in or in relation to the manufacture of final products, whether directly or indirectly and whether contained in the final product or not, within the factory of production. Thus, prior to 1.3.2003, LDO was a specified input, only if used in the manufacture of final products on or before 28.2.2003. It is, therefore, clarified that the existing stock of LDO, as on 28.2.2003, would not be eligible for the purpose of availing Cenvat credit. However, if any, Cenvat credit had been availed, in terms of rule 3 of the aforesaid Rules, on LDO, lying in stock as on 28.2.2003, the same is required to be reversed by the assessee.
3. The field formations may be advised accordingly.
Joint Secretary (TRU)