The Central Excise Rules, 1944

1[AAAA. CREDIT OF DUTY PAID ON CAPITAL GOODS USED BY THE MANUFACTURER OF SPECIFIED GOODS

Rule 57R. Credit of duty not to be allowed or denied or varied in certain circunstances and adjustment in duty credit.--(1) Credit of the specified duty paid on the capital goods (other than those cleared either to a unit in free trade zone or to a hundred per cent export-oriented undertaking or to a unit in an Electronic Hardware Technnology Park) shall not be allowed if such capital goods are used exclusively for production of a final product which is exempt from the whole of the duty of excise leviable thereon (other than a final product which is exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year) or is chargeable to nil rate of duty :

Provided that the credit shall not be allowed in respect of the components, spare parts and accessories of such capital goods which are used for the aforesaid purposes.

(2) Credit of the specified duty allowed in respect of any capital goods shall not be denied or varied on the ground that any intermediated products have come into existence during the course of manufacture of the final product and that such intermediate products are for the time being exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty :

Provided that such intermediate products are specified as final products in Annexure to rule 57Q.

(3) No credit of the specified duty paid on the capital goods shall be allowed if such capital goods are acquired by a manufacturer on lease, hire-purchase, loan or by any other transaction other than direct purchase, whereby the property in the said capital goods is not ransferred to such manufacturer.

(4) If specified duty paid on any capital goods, in respect of which credit has been allowed under rule 57Q, is varied subsequently due to any reason resulting in payment of refund to, or recovery of more duty from the manufacturer or importer, as the case may be, of such capital goods, the credut allowed shall be varied accordingly by the adjustment in the credit account maintained under sub-rule (5) of rule 57T or in the accounts maintained under rule 9 or sub-rule (1) of rule 173G, or if such adjustment is not possible for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the credit under rule 57Q.

(5) No credit of the specified duty paid on the capital goods shall be allowed, is such manufacturer claims depreciation under section 32 of the Income Tax Act, 1961, (43 of 1961) on that part of value of capital goods which represents the amount of specified duty paid on such capital goods.

 

1. Inserted by M.F. (D.R) Notification No. 4/94--C.E. (N.T.), dated: 01-03-1994.