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

Cenvat credit on dealer invoices may be allowed when registered dealers instruct direct delivery, but clarification is needed.
The amendment permits a registered dealer to have goods delivered directly to the ultimate recipient with the dealer shown as buyer, and allows cenvat credit on the basis of the dealer's invoice; a manufacturer's invoice naming the consignee has previously been accepted for credit. Conflicting views have arisen on whether unregistered dealers must now register to enable recipients to claim credit, and commentators urge CBEC clarification to resolve the uncertainty and avoid litigation.