Whether cenvat credit availed on Capital goods used for job work process for other person.

[samiuddin ansari]

Sir,

I would like to know as to whether I have to reverse the Cenvat credit availed on Capital Goods i.e. VMC Machines proportionatly, if used for the purpose of job-work process on goods sent by another manufacturere as well as for the process of our own manufactured goods. Kindly, through some light on the issue with supportive provisions of laws or Circulars/clarifications issued by the Board.

Please solicit necessary guidance in to the matter.

Thanks with regards,

(S.N.Ansari)

AI Summary

Cenvat credit on capital goods allowed even when used for job work, subject to duty payment and supplier registration conditions.
Cenvat credit on capital goods is generally admissible when those goods are used for job-work processes for other principals and need not be reversed pro rata solely because they serve multiple job-work uses. A job worker who pays duty on behalf of the principal and manufactures dutiable products may take credit; where goods are returned under an exemption without duty discharge, the job worker cannot claim credit. Purchase from an unregistered supplier also precludes credit.