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

CENVAT credit eligibility depends on registered manufacturer status and correct bill of entry and declaration requirements.
CENVAT credit is available only to a registered manufacturer/producer of final products or a provider of output services and covers excise duty and specified additional customs duties. Payment of duties on imported tools and delivery to a job worker does not by itself confer credit unless the importer has the requisite registration/status, the bill of entry records the buyer and delivery address appropriately, the buyer declares it will not claim CVD/SAD credit, and procedural conditions for job-worker claims are satisfied.