CA Pradeep Jain and CA Preeti Parihar

Budget, 2012 has brought a facility of transferring Cenvat Credit for the manufacturer having more than one registered premises.  Notification No. 18/2012-Central Excise(Non-Tariff) dated 16.3.2012 has been issued in this regard which is effective from 1.4.2012. This notification says that Cenvat balance of special additional duty (SAD) lying with any of the premises can be transferred to any other premises of the same manufacturer who have obtained the common Permanent Account Number.

This transfer can be made at the end of each quarter by making an entry for the same in the documents maintained under rule 9. Further, a transfer challan shall also be issued which will contain the registration no. and name and address of both the registered premises – transferring and receiving the Cenvat Credit of SAD. Particulars mentioned in the document under rule 9 will also be specified in this challan.

The recipient unit will be allowed to take the credit on the basis of this transfer challan. The manufacturer or producer shall submit the monthly return, as specified under these rules, separately in respect of transferring and recipient premises.

However, the benefit under this notification will not be allowed if the manufacturer is obtaining benefit under the following notifications:-

(i) No. 32/99-Central Excise, dated the 8th July, 1999

(ii) No. 33/99-Central Excise, dated the 8th July, 1999

(iii) No. 39/2001-Central Excise, dated the 31st July, 2001

(iv) No. 56/2002-Central Excise, dated the 14th November, 2002

(v) No. 57/2002-Central Excise, dated the 14th November, 2002

(vi) No. 56/2003-Central Excise, dated the 25th June, 2003

(vii) No. 71/2003-Central Excise, dated the 9th September, 2003

(viii) No.20/2007-Central Excise, dated the 25th April, 2007

(ix) No. 1/2010-Central Excise dated the 6t h February, 2010

The above notifications are area based exemptions which are issued to exempt certain products if these are manufactured and cleared from specified areas.

This is a well come step. Earlier this facility was available to Large Tax Paying units (LTU) only. However, LTUs are allowed to transfer any type of Cenvat balance – whether it is basic excise duty or SAD or Education cess or Secondary and higher education cess. Similar facility of transferring credit of SAD has been allowed to manufacturers having more than one registered premises. Let’s hope this restricted transfer facility will be extended from SAD to other credits also just like LTUs.

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8 responses to “Note on Rule 10A of Cenvat Credit Rules”

  1. G. Kumar says:

    what is meaning of at the end of each quarter?
    is it credit taken in each quarter or balance of the credit lying at the end of quarter, may be it taken before 6 months/1 year, etc.

  2. niranjan says:

    Sir,
    we have some cenvat balance of our joint venture organization can we transfer and trellised.

  3. PRUSOTTAM KUMAR SINGH says:

    sir,
    please send me additional duty challan , under rule 10a of cenvat credit rules.

    Regards
    Prusottam
    9871773731

  4. Mahadev Kapse says:

    Dear Sir,
    we closing the our working unit, so cenvat credit balance can we utilise (avail) new unit. pl. suggest.

  5. Keshav says:

    sir,
    If My firm ” X” is a dealer and not registered under excise supplies goods from a manufacturing company “Y” to an end user company ” Z”.
    End user demands for excise benefit .
    1. Can i ” X” bills “Z” and pass-on the excise benefit to the end user.
    2. What is this transaction called?
    3. Is there is any chances that Z will knows our margins?
    4. what are precautions which i have to follow before this transaction.

  6. Amitabha Mukherjee says:

    SIR, PARTICULARLY WE RECED ADDL. DUTY (IMPORTS) 4%, IS THIS PERMISSIBLE TO TRANSFER ?

    wHAT IS MEANT FOR QUARTERLY BASIS? wHERE WE CAN GET THE CHALLAN FORMAT?

  7. Rajesh Kulkarni says:

    Sir,

    Can you explain that SAD means AED ( GSI), ADC or any other duty.
    Because I have balance in AED hence shall I transfer this balance to my sister concern company

    Pl explain

  8. Prakash Nimbalkar says:

    This rule is applicable from 01.04.2012 but what about opening balance. Can we transfer opening balance SAD amount to sister unit on 30.06.2012?

    We are seek your confirmation in this regards.

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