Material for job work

[palaniappan thirukalathiappan]

Dear All,

Please clarify me weather any permission is required from Central Excise for sending out material and bringing back to the original unit or simple intimation will do.  Further i would like to know basic differences between 16A, 16B, 16C of Central Excise Rules where exactly applicability of the above rules will fall.

Thanks & Regards

SRINIVAS

[YAGAY andSUN]

Either you can remove material under Rule 4 (5) (a) of the CENVAT credit Rules, 2004 as amended time to time or you can opt the procedure as mentioned in the Notification No. 214/86 for sending and receiving back goods for the purpose of jobwork.  If required, you can seek the persmission of jurisdictional AC/Commissioner (as the case may be).

Regardig Rule 16 (1), 16 (2), and 16 (3), these all pertain to Bringing goods for repairs, re-making etc. 

In Rule 16 (1) you can bring back duty paid final goods to your factory premises as Inputs for repair, refining, reconditioning and for any other reasons. you can avail the cenvat credit and utilize this credit according to the said rules.

Accordingly to Rule 16 (2) if it does not amount to manufacture then you would have to reverse the cenvat credit which you had availed on return goods.

And Rule 16 (3) specify that if there is any difficulty to follow the Rule 16 (1) or 16 (2), then specific permission may be obtained from the concerned commissioner of the Central Excise.

AI Summary

CENVAT credit procedures allow sending materials for jobwork under prescribed rules or notification with commissioner permission. Sending materials for jobwork may be effected either by removal under Rule 4(5)(a) of the CENVAT Credit Rules or by following the Notification No. 214/86 procedure; permission from the jurisdictional Assistant Commissioner or Commissioner can be obtained if required. Rules 16(1), 16(2) and 16(3) govern bringing back duty paid final goods for repair, reconditioning or similar processes: Rule 16(1) permits return as inputs with entitlement to CENVAT credit, Rule 16(2) mandates reversal of credit where the process is not manufacture, and Rule 16(3) allows the Commissioner to grant relief where compliance is difficult.