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

Cenvat credit eligibility: sending inputs to a job worker must be for authorised processing or testing, not mere trial purpose.
Rule 4(5)(a) permits sending inputs or capital goods to a job worker for processing, testing, repair, re conditioning or manufacture of intermediate goods and still claim Cenvat credit, but does not authorize removal for a "trial purpose." If the recipient is not excise registered, the compliant practice is to remove the goods on an excise invoice with duty payment, allow return on challan referencing that invoice after testing or processing, and then take Cenvat credit on the assessee's invoice upon receipt.