JOB WORK UNDER CENTRAL EXCISE

[VINOD KUMAR]

DEAR EXPERTS GOOD EVENING. WHAT IS THE DIFFERENCE AMONG JOB WORK CARRIED OUT UNDER:- 1. NOTF. 214/86.2. RRULE 4(5)(a) OF CCR 2004.

3. UNDER RULE 16(A) OF CER 2002.

4. UNDER RULE 16 (B) OF CER 2002.

5. UNDER RULE 16 (C) OF CER 2002.

PLEASE EXPLAIN IN DETAIL. I CAN NOT UNDERSTAND THAT WHEN THERE IS SO SIMPLE PROCEDURE UNDER RULE 4 (5)(a), WHAT IS THE USE OF INTIMATION UNDER 214/86 OR THE PERMISSION OF COMMISSIONER UNDER RULE 16. THANKS AND BEST REGARDS.

[Mahir S]

Akashji

All the rules quoted above are different and have no co-relation with each other.

Noti no. 214/86 is in respect of movement of goods for job work purpose under cover of challan, with prior permission of the department but not related to any cenvat credit rules condition in any way. Intimation is required so that the department is aware about the job work activity undertaken and the parties for whom such job work is done.

Rule 4(5) (a) of Cenvat Credit Rules, 2004 is for the purpose of job work under cenvat credit rules and pertains to reversal of cenvat at time of removal of goods for such job work and availment again of the cenvat credit at time of receipt of the said job worked goods. If job work goods are not received back in 180 days, then this rule is the most dangerous rule under job work.

Rule 16 is regarding finished goods received back in the factory premises for specific purpose as detailed under the said rule and is not related to job work. Permission of the Honourable Commissioner under rule 16 of Central Excise Rules, 2002 is required only if there is any difficulty in following the said rule and generally not required in normal course..

All above rules are of utmost importance and backbone of excise laws and rules.

 

[VINOD KUMAR]

THANK YOU VERY MUCH SIR FOR YOUR QUICK REPLY. SIR WHAT I HAVE MENTIONED IS NOT RULE 16 BUT RULE 16 (A) (B) AND (C) OF CER 2002.I HAVE PERUSED ALL THE ABOVE RULES MORE THAN 10 TIMES BUT STILL UNABLE TO UNDERSTAND WHY ALL THE MANUFACTURERS FOLLOW DIFFERENT RULES INSTEAD OF FOLLOWING RULE 4(5)(a) i. e. NO PERMISSION/INTIMATION REQUIRED, SIMPLY REVERSE CENVAT CREDIT ON 181st DAY. PLEASE REPLY.

THANKS AND BEST REGARDS.

[Mahir S]

rule 4(5)(a) of Cenvat Credit rules, 2004 comes in picture only when assessee is availing cenvat credit on inputs and such inputs/semi finished goods are removed further for job work. Under rule 4 (5) (a) as credit has been availed on inputs removed for job work, so if such job worked goods not returned back to factory premises within 180 days, then cenvat credit is required to be reversed.

rule 16 A/B/C of Central Excise rules, 2002 comes in picture for assessee who are availing cenvat credit/ not availing cenvat credit but wants to carry out any work/process relating to job work without reversing/availing cenvat credit. There are also units not availing cenvat credit but carrying out processes relating to job work, so for them such rule is useful. The procedure to be followed herein is clear and simple and not as confusing as it appears under the said rules. In other words, Notification no. 214/86 CE regarding job work is nothing but rule 16 A/B/C.

 

AI Summary

Job work regimes: movement, cenvat reversal, and procedural routes govern treatment of inputs and finished goods returned for processing. Notification 214/86 covers movement of goods for job work under challan with departmental intimation but does not affect cenvat credit conditions. Rule 4(5)(a) CCR 2004 requires reversal of cenvat where inputs/semi finished goods sent for job work (with credit availed) are not returned within the prescribed period and permits re availment on receipt. Rules 16A-16C CER 2002 set out procedures to carry out work/processes and return finished or processed goods without automatic reversal mechanics, and departmental permission is required only in case of difficulty.