excise modvat availability on endrosed excise invoice

[Guest]

Dear Sir, Please Clear this issue on very urgent basis....

We purchase raw material from a first stage dealer. This first stage dealer purchased these goods from outside his state as exup purchase. Supplier prepared all the invoices in the name of first stage dealer and dispatch the material by railway rake.

Before taking the delivery of the rake, first stage dealer sold these goods to us on Railway Receipt Endorsement basis. He made a proper endorsement on back of Excise invoice stating “these bills are endorsed and goods delivered to M/s ……………………………….”along with on railway receipt also and issued a commercial invoice for sale in transit to us. We took the delivery from railway department and received the material.

Now can u get the excise credit on endorsed Excise invoice of parent supplier?

[Ganeshan Kalyani]

Sir, in my view yes you can take the credit. Thanks

[MUKUND THAKKAR]

it is valid in case of salestax point of view. but according to me excise invoice should be name of consignee. please check. before availment of cenvat credit because in case of traders, buyer consignee is allowed,endoresment is just change onwner ship of goods. but for availing cenvat credit all condition must be fullfill.

[Guest]

Dear Ganeshan Kalyani, Thanks for your quick response. My view is also same but do we have any circular or case law to test our opinion as our excise suprintendent denied to allow the credit to us.

[Guest]

Dear Mukund Thakkar, Thanks for reply also .

we know the cenvat credit rules but in this case how can a dealer pass on the excise credit to us ?

If our parent supplier issue a letter for the same and state that " These transaction is made as sale in transit by endrosement of Railway Receipt and of our Excise Invoice. M/s ...........................is the final receiver of these goods and entitle to get the cenvat credit of these goods"

can our purpose be solved by this ?

[MUKUND THAKKAR]

Any letter / certificate is not valid documents for availment of taking cenvat credit. please request your supplier to adding your name as a consignee in the all invoices if possible. This is the only way to you have avail the cenvat credit. other wise dept will raised the objection and issuing SCN for wrongly availment of cenvat credit.

This is my view.,.

[KASTURI SETHI]

Sh.Pulkit Aggarwal Ji,

I fully endorse the views expressed in all the replies by Sh.Mukund Thakkar, Sir. In addition to these, I further add that your purchase of duty-paid excisable goods conform to the definition of 'First Stage Dealer' in terms of Rule 2(ij) of Cenvat Credit Rules, 2004. You will have to follow the advice of Sh.Mukund Thakkar, Sir, in order to avoid litigation. Your name as consignee must be reflected in the cenvat invoices.

 

[Rajagopalan Ranganathan]

Sir,

As per CBEC's Circular No. 96/7/95-CX dated 13.2.1995 if the whole consignment is despatched to buyer from manufacturer cenvat credit is permissible, if the name of the final buyer is shown as consignee (though the invoice is in the name of dealer). But in your case the ivoice is in the name of first stage dealer and your name is not indicated as consignee. Therefore, in my view, the first stage dealer from whom you have purchased the raw material has to issue a cenvatable invoice under rule 11 of Central Excise Rules, 2002. Then only you are eligible to take credit.

[Ganeshan Kalyani]

Sir, Mukund ji has correctly replied. Sale in transit in VAT is allowed by endorsing the documents but in Central Excise the document based on which Cenvat Credit is allowed should be the document issued by the supplier clearly mentioning your name as consignee. In this case though the Tax Invoice is endorsed which is valid document under VAT Act but for Excise your dealer should raise invoice in your name or the supplier should include your name as consignee. Thanks.

[Suryanarayana Sathineni]

Dear Friends,

In transit sale (E1 sales) is an accepted transaction in terms of Sales tax/VAT. Generally, in this situation, the owner of the goods can make an endorsement on the documents about the pary to whom, the goods are sold in transit and based on that endorsement the recipient can take credit.

Further, in some situations, the Dealer place order on the manufacturer with a direction to supply the goods to the ultimate consumer in this case, the manufacturer, while raising the invoice need to mention the consignee as the ultimate consumer name on account of the dealer who placed the order on the mfr. On this basis also credit can be availed.

Best Regards

Suryanarayana

[Guest]

Dear All,

Thanks for your so much concern.

I got you answer correctly but now please let me know is it possible to make a excise invoice in case of transit sale as dealer sold this goods without taking delivery of goods? i.e A Dealer can prepare excise invoice without taking the delivery of goods?

if Yes , Can Dealer make Excise invoice in current date i.e. after filing of excise return of that quarter ?

please take it very urgent.

[KASTURI SETHI]

Dear Sh.Aggarwal Ji,

Pl. go through this circular. It may be helpful to you in any way.

Transit sale through dealer - Availment of Cenvat credit - Clarification

Circular No. 1003/10/2015-CX, dated 5-5-2015

AI Summary

Cenvat credit eligibility requires the buyer to be named as consignee on the excise invoice for credit to be allowed. Cenvat credit cannot be taken on an excise invoice merely endorsed by a dealer or supported by letters; the excise invoice or cenvatable invoice must expressly show the buyer as consignee or the dealer must issue a cenvatable invoice under the central excise rules to allow credit.