LEVY OE EXCISE DUTY ON JOB WORK (INTER-UNIT TRANSFER)

[S.C. WADHWA]

A unit of a Pvt. Ltd. Co. made job work for another unit of same

company. After job work, materials transferred vide invoice

bearing "transfer of goods to branch office". Excise duty was levied

on job work.

Query is :

Please mention how will the transferree book in its account

i.e. how transferre can avail cenvat of excise duty

since it is inter-transfer of goods i.e. it is neither sale

nor job work

[Mahir S]

Sir,

Please refer sub rule 5(a) of rule 4 of cenvat credit rules, 2004 for necessary clarification.

Also, cenvat credit can be availed on the basis of the documents prescribed under rule 9 of cenvat credit rules, 2004.

[VINOD KUMAR]

As per rule 4(5)(a) job worker can remove the job worked goods without payment of duty. Even then if duty has been paid then principal manufacturer can avail cenvat on the basis of invoice of job worker.

AI Summary

Cenvat credit entitlement can be claimed on inter unit job worked goods where duty was paid, based on job worker invoice.
Where a job worker removes job worked goods, rule 4(5)(a) permits removal without payment of duty; if duty is paid, the principal manufacturer/transferee may avail Cenvat credit on the basis of the job worker's invoice, subject to documentary compliance under rule 9 of the Cenvat Credit Rules, 2004.