Loan licensee and Cenvat credit

[shaji thomas]

Whether a pharmaceutical company who is doing the job work of other units as loan licensee(discharging the duty on finished goods and maintaining common cenvat credit register)can utilize the cenvat credit of others for discharging the duty liability ontheir own clearances.? whether the accummulated cenvat credit of the suppliers(who is exporting the goods under bond) can be adjusted towards job charges to be collected after utilizing the same in their own clearances?

[Surender Gupta]

A person who manufactures goods for his own behalf or on behalf of others, is a  manufacturer and liable to discharge the excise duty liability as the company is doing as explained in the query. 

Since the company is paying duty of excise on goods manufactured by it (be it its own or of principal), the company is eligible for all the consequential benefits. There is no need to maintain separate records to show that how much credit is pertaining to own manufacture and how much is pertaining to others manufacture. You can use the credit in general. You can also claim the refund of duty of excise, in case of export, if all other conditions are satisfied.

AI Summary

Cenvat credit use: loan licensees may apply accumulated credit to discharge excise duty on their clearances and seek export refunds.
A unit acting as a loan licensee who pays excise duty on goods manufactured by it, whether for its own account or for others, qualifies as a manufacturer and may utilise accumulated cenvat credit generally to discharge duty on its clearances without maintaining segregated records; the unit may also claim refund of duty on exports if statutory conditions are satisfied.