cenvat credit

[Mahesh S]

Presently we are manufacturing juice from third party manufacturer. We used to import the raw material and delivered directly @ our manufacturer partner.

Is it possbile to get Cenvat credit by our manufacturer partner?

We are not yet registered in central excise.

Please advise

[YAGAY andSUN]

The person claiming credit is required to establish that the inputs were used during the manufacturing process in his factory and that without the use of those materials, the manufacturing process in could not be efectively carried out - Wheels India Ltd. v CCE 1993 (69) ELT 71 (Mad- cegat).

[shamanthaka mani]

Yes The third party manufacturer can avail cenvat credit.  However the duty paying documents should be in the name of third party manufacturer.  If the goods are imported in your name and B/E is in your name they cannot avail credit on the basis of such doucment.  Therefore first you have to obtain Central Excise Registration, take credit and pass on the same to third party by issuing your invoice.

[SANTHANA KRISHNAN]

Alternatively you can import in your name and sell him on High seas sales basis to the third party to file bill of entry so that he can claim cenvat credit.

AI Summary

Cenvat credit entitlement depends on documentary title and actual use of inputs; structure import or registration accordingly. Entitlement to Cenvat credit depends on the registered manufacturer proving actual use of inputs in its factory and having duty paying documents in its name; without registration and documentary title, credit is not supportable. Practical options include the third party obtaining Central Excise registration and import documents in its name, or the principal effecting a high seas sale so the third party files the bill of entry and claims credit.