Rajan Textiles Ltd., a large scale industry in Mumbai, purchased a machine used for pollution control on 1st October, 2013 for a cum duty price of ₹9,00,000. Excise duty was levied at the rate of 12.5%. The machine was u

Computation of CENVAT Credit Sr. No. Particular Amount (in ₹) A Cum-duty Price of the Machine 9,00,000 Rate of Excise Duty 12.50% Excise Duty Paid (₹9,00,000 * 12.50 / 112.50) 1,00,000 B Cenvat Credit Allowable on the amount For 2013-14 (50% in the first financial year) 50,000 For 2014-15 (50% in the subsequent financial year) 50,000 C Calculation of CENVAT Credit Repayable due to resale of Machine (i) Cenvat Credit Availed 1,00,000 Less: On First 50% (50,000 * 2.5%) * 8 (months from Oct 2013 to May 2014) (10,000) Less: On Second 50% (50,000 * 2.5%) * 6 (months from Jun 2014 to Aug 2015, considering full year for 2014-15 and part for 2015-16) (7,500) 82,500 (ii) Transaction Value of resale 6,00,000 Rate of Excise duty on the date of sale 12% Excise Duty on resale (₹6,00,000 * 12%) 72,000 Reversible Cenvat Credit due to resale of assets is (i) or (ii) whichever is higher 82,500 When capital goods are removed after use, amount of cenvat credit reversible shall be calculated as per Rule 3(5A) of Cenvat Credit Rules, 2004 .