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:-
(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.