Amendment in Rule 11 of CER

[JAMES PG]

Rule 11 of CER is amended vide Not 8/2015 so as to facilitate a registered dealer to issue Cenvatable Invoice without receipt of goods at his registered premises. As per the amended provisions, manufacturer may issue an Invoice showing consignee as the ultimate recipient the Dealer as the buyer. Credit is allowed on the basis of Dealer Invoice issued and not based on the manufacturer’s Invoice. But manufacturer’s Invoice showing recipient name as consignee is also a valid document for Cenvat as has been clarified in Circular No 96/7/95-CX dated 13-2-1995. There are views that in view of the amendment, all unregistered dealers who carry on trade based on transit sale basis need to register for enabling the recipients to avail Cenvat credit and also manufacturer’s Invoice showing a Regd Dealer as buyer is invalid for credit. Views of the learned members are awaited on this.

AI Summary

Amendment to Rule 11 of Central Excise Rules 2002 sparks debate on Cenvat credit eligibility for unregistered dealers. The discussion revolves around an amendment to Rule 11 of the Central Excise Rules, 2002, which allows registered dealers to issue Cenvatable invoices without receiving goods at their premises. This change raises questions about the validity of invoices from unregistered dealers and the necessity for them to register for Cenvat credit eligibility. Participants express concerns about potential litigation and ambiguity, suggesting that the Central Board of Excise and Customs (CBEC) should provide clearer guidance. There is debate over whether the amendment affects the ability of end consumers to claim credit when purchasing through unregistered dealers.