Movement of Input under cenvat Rule 4(5) (a)

[SURYAKANT MITHBAVKAR]

We procured machine from our vendor but that vendor is not registered under Excise Act so Motors and Gear Box require for that manufacturing machine we are buying in our name and availed cenvat credit and therafter we send that Motor and Gear Box under Challon 4(5) (a) to that vendor for assembled that machine. In Challon we are stating purpose is Trial Purpose. Pl. advice this process is correct or not

AI Summary

Clarification Sought on Cenvat Rule 4(5)(a) for Sending Inputs to Unregistered Vendor for Trial Assembly Purposes A discussion forum participant inquires about the correctness of a process involving the movement of inputs under Cenvat Rule 4(5)(a). The issue involves sending motors and gearboxes to an unregistered vendor for assembly, labeled for 'trial purposes.' The reply advises that while Cenvat credit rules allow sending inputs for processing, they do not specify removal for trial purposes. It suggests removing goods on an excise invoice with duty payment to the non-excisable vendor and, after testing, having the vendor return the goods on their challan, allowing the original party to reclaim Cenvat credit.