CONSIGNEE OF TOOLS

[Uday Ranalkar]

Hello,

If I am a consignee of tools imported from China. ( Buyer is parent company in US). And the tools were directly sent to Job worker in Pune. Now I am paying duties while importing and sending tools directly to Job worker. ( I take credit of duty paid and also issues job work challan). AM I A MANUFACTURER AND ELIGIBLE FOR CREDIT AS THE ASSETS ARE NOT RECOGNIZED BY MY COMPANY IN INDIA ( BUYER IS US COMPANY) ?

Thanks in anticipation

[Rajagopalan Ranganathan]

Sir,

Rule 3 (1) of CENVAT Credit Rules, 2004 clearly states that "a manufacturer or producer of final products or a provider of output service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of -

(i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act;

(vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) , (vi) and (via);

(viia) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act."

Therefore you should have a registration to manufacture excisable goods and then only you will be able to take credit. If the bill of entry of the imported goods has both the address of the buyer and the factory where the goods are to be delivered then the job worker is eligible to take the credit. However the buyer should file a declaring on the face of the bill of entry that he is not availing the credit of CVD and SAD paid on the imported goods.

[Ganeshan Kalyani]

Either you should be a manufacturer or trader of excisable goods to avail credit.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Rajagopalan.

[Mahir S]

If, after carrying out the job worker activity in India, you intent to raise the bill from your own company for selling/exporting the tools to the Buyer company in USA , then you can avail credit thereon.

AI Summary

Eligibility for CENVAT Credit on Imported Tools Requires Consignee Registration as Manufacturer; Conditions for Job Worker Claims Explained. A consignee inquired about eligibility for CENVAT credit on tools imported from China and sent directly to a job worker in Pune. The buyer is a US-based parent company, and the consignee pays duties upon import. Responses indicated that to claim CENVAT credit, the consignee must be registered as a manufacturer of excisable goods. If the bill of entry includes both the buyer's and factory's addresses, the job worker can claim credit, provided the buyer declares non-availment of credit on the bill. Additionally, credit can be claimed if the consignee sells or exports the tools post-job work.