EOUs -CENVAT Credit on the duty paid on Capital goods at the time of de-bonding to be allowed

By Vijay Kumar

DDT had carried this on Friday, to which a studious Netizen who virtually researches taxes, adds.

It's wonderful to see the circular of 1996 and the case law in 2007 which explained why the recent notification allowing credit of duty paid at the time of debonding .

I want to supplement it by saying that even without reference to the circular and the case law, the present position seems to be:

You pay Duty under Notification No. 52/2003 – Cus at the time of debonding whereas you pay amount equal to central excise duty under Notification No. 22/2003- CX . Since the amount paid under 22/2003 is not duty, there is every reason for the department to disallow the credit while they cannot do so for amount paid under 52/2003 which is a duty.

Now with this amendment, both the things would be allowed as credit and both have legal sanctity. Hope you think this is interesting