FREE ISSUE MATERIAL

[HITENDRA DAVE]

DEAR SIR

WE ARE MANUFACTURING FILTERS / MACHINERY CHAPTER 84 , OUR CUSTOMER IS VISAKHAPATNAM , WE WANT TO SENT SAME'' FREE ISSUE MATERIAL''DIRECT TO  OUR CUSTOMER VISAKHAPATNAM , FINALY FINISH GOOD DESPATCHED TO  CUSTOMER  Y TO Z  COMPANY UNDER RULE 4(6)  WITH PAYING EXCISE DUTY BY X COMPANY UNDER PERMISSION 4(6)

X- IN GUJARAT ,  Y - IN VISAKHAPATNAM  ,Z - IS ALCO IN VISAKHAPATNAM

Y AND Z DISTANCE IS APPROX 250 KMTRS

MY QUESTION IS HOW TO SENT FREE ISSUE MATERIAL TO Y  COMPANY  FOR FABRICATION

 REQUIRED PROCEDURE

REGARDS

HITENDRA  DAVE

[Radha Arun]

The question is not very clear; could you review it and clarify? Is the free issue material sent to Y or Z ? What is the commercial transaction here - who is your customer, is it Y or Z ?  What is the free issue material and what is its use? Have you taken Cenvat credit on this material?

[YAGAY and SUN]

Under  Central Excise Laws, Direct material from the supplier to the job-worker can be sent. Further, for controling purpose you must have to issue a challan, clearly stating that material was issued directly by the supplier.  Further, you would have to avail CENVAT credit after receiving the whole matetrial.

 

AI Summary

Direct supply of free issue material to a job worker requires challan documentation and receipt-based Cenvat compliance.
Direct dispatch of free issue material to a job-worker is permissible under Central Excise, provided excise control and input accounting are maintained. A challan must accompany the consignment stating that the supplier issued material directly to the job-worker and specifying its intended use. The principal manufacturer may claim Cenvat credit only after receipt and proper accounting of the entire material, with supporting documentation establishing the chain of custody and commercial relationships among supplier, job-worker and final customer.