CREDIT ON THIRD PARTY BILL OF ENTRY

[SHARMA NARAYAN]

We are given pkg order to party for setup water treatment plant,

he imports material and reimbursement of cenvat and additional duty and cvd from us

can we take cenvat credit on that BE but there is no ref of our company,

how can we claim the duty , party is issuing the letter to us

can we take credit on that

can we take credit on below ref

in the terms of Rule 9(1)(C) of cenvat credit Rules 2004 r/w Public Notice No.16/2006 dtd. 22-03-2006 & P.N.NO. 34/06 Dt.24.05.06 both issued by commr.customs (import) mumbai

[Rajagopalan Ranganathan]

Sir,

You cannot avail the credit based on invoice issued by your contractor. Since the goods are imported by your contractor CVD and SAD paid on the imported goods will get merged in the cost of the imported goods if your contractor is not eligible to avail the credit. The bill of entry cannot endorsed in your favour since the same is not provided in rule 9 of Cenvat Credit Rules, 2004. Naturally the CVD and SAD paid is to be merged with the cost of imported goods at your end.

[YAGAY andSUN]

It is settled legal position that ownership is not the criteria to avail the CENVAT credit.

[KASTURI SETHI]

This issue has already been discussed in detail in this forum during Feb, 2017.

AI Summary

Cenvat credit eligibility on third party imports challenged; duties may merge into cost if importer cannot claim credit. Whether a principal can avail CENVAT credit on duties paid on goods imported by a contractor under a bill of entry not in the principal's name is contested. One view advises that credit cannot be claimed from the contractor's invoice and the bill of entry cannot be endorsed in favour of the principal because Rule 9(1)(c) of the Cenvat Credit Rules, 2004 does not permit such endorsement; consequently, countervailing duty and special additional duty paid on import merge into the cost of the imported goods for the principal if the importer (contractor) is not eligible to avail credit.