Rule 10A – Transfer of CENVAT credit of SAD from one factory to another :

(1) Transfer of credit of SAD: Special additional duty @ 4% is paid on imported goods under section 3(5) of Customs Tariff Act, 1975 and CENVAT credit for the same can be availed by a manufacturer/producer of final products. A manufacturer having more than one registered premises (but a common Permanent Account Number) may transfer unutilised CENVAT credit of such additional duty lying in balance with one of his registered premises at the end of a quarter, to his other registered premises.

(2) Manner of transferring credit: The credit can be transferred by-

(i) making an entry for such transfer in the documents maintained under rule 9;

(ii) issuing a transfer challan containing registration number, name and address of the registered premises transferring the credit and receiving such credit, the amount of credit transferred and the particulars of such entry as mentioned in clause (i), and such recipient premises may take CENVAT credit on the basis of the transfer challan.

(3) Filing of separate monthly returns: The manufacturer will have to file a monthly return separately in respect of transferring and recipient registered premises.

(4) Units availing area based exemptions not entitled for transfer of credit: However, transfer of credit will not be allowed if the transferring and recipient registered premises are availing areas based exemption in North Eastern States, Jammu and Kashmir, Sikkim or Kutch district