Tinting Activity - Dealer (Depot) can carry ot such activity

[Guest]

Dear Sir,

We are a mfg co, we are supplying base paint to our depot registered under excise and stainer from our another factory to the same depot. Can such depot can carry out such tinting activity at depot and clear the goods to the end customer. If yes whether such depot can avail cenvat credit of base paint and as well as stainer received and pass on the same to the end customer. Or It the tinting activity which will be carried out by the depot not amts to manufacture then whether the depot can only sell goods on commercial invoice,Please explain, Please give any reference regarding this,thanks and regards.

[Arun Kumar Singh]

The depot will be registered under central excise as a depot of manufacturing unit. You can take the cenvat credit at depot and pay the excise duty on the value addition of the goods even if there is no amounts to manufacture.

AI Summary

Cenvat credit entitlement: depot tinting permitted but excise duty payable on value addition before clearance to customers. A depot registered as a depot of a manufacturing unit may perform tinting and clear goods to end customers; the depot can take cenvat credit of inputs (base paint and stainer) and must pay excise duty on the value addition effected at the depot, including where the tinting activity is not treated as manufacture.