Proceduire for Job Work on material supplied by registered dealer

[SRIVATSAN RAJAN]

I am a registered dealer under Central Excise. I import Steel Coils in my name. I supply the same to my Job Worker free of cost. Job Worker converts the same into pipes and the pipes are despatched from the Job Worker's factory to my customers. I want to follow the below mentioned procedure:

1. I will raise an Excise Invoice (Stock Transfer) Invoice showing the name and factory address of my Job Worker;

2.The Job Worker will take CENVAT Credit in their RG 23A; convert the raw materials into pipes and raise an Excise Invoice on me, for the full value of the tubes and charging excise duty on full value and debiting his RG 23A;

3. I will raise my invoice on my customers and despatch the goods;

4. There is no need to follow Notification 214/86 which applies only to manufacturers

5. CESTAT Chennai Bench has held in Mahadev Industries Vs Commissioner of Central Excise that the ownership is not required to avail the CENVAT Credit; so long as their name and factory adreess are shown in the CENVAT availing documents.

6. please confirm that the above mentioned procedure is in order

Dear Rajan

What about payment of excise duty on conversion of pipe from stirp.

AI Summary

CENVAT Credit entitlement when inputs are supplied to a job worker and duty implications on conversion operations.
The issue concerns a registered dealer supplying imported steel coils free to a job worker for conversion into pipes, proposing to effect a stock-transfer excise invoice naming the job worker; the job worker would take CENVAT Credit in RG 23A, convert inputs, raise an excise invoice to the dealer debiting their CENVAT account, and the dealer would thereafter invoice customers. Questions include applicability of Notification 214/86, whether ownership transfer is required to avail CENVAT Credit, and whether excise duty is payable on the conversion operation.