Job work reg.

[vinay wakde]

We are manufacturer of Liquid Carbon Dioxide & Dry Ice. Presently our plant is under shut down. To fulfil the requirement of our customers for Dry Ice, we are purchasing Liquid Carbon Dioxide on payment of Excise duty and converted the same into Dry Ice.   We shall be taking Input CENVAT credit on Liquid Carbon dioxide purchased / received by us and  Excise duty shall be paid while removing DRY ICE (Finished Goods) from our factory.

Kindly let us know whether manufacturer of Liquid Carbon Dioxide & DRY ICE, shall do such type of job work in the his factory premises? Is their any excise litigation in future for such transactions. Kindly clarify.

Regards,

VINAY

 

 

[YAGAY and SUN]

If your plant is shut down then on what basis you are indulging in the manufacturing activities and availing CENVAT credit?

This may raise the litigation in near future.

 

[vinay wakde]

We are manufacturer of Sponge Iron. The production of Sponge Iron  is stopped temporarely. The liquid Carbon Dioxide & DRY Ice are our by products. Kindly let us know whether we purchase liquid Carbon Dioxide (as a Input) & convert /compressed into DRI Ice by using existing facility in the plant (i.e. Job work) for out sider, we can meet our customers requirement as well as it will be revenue generation for us.  I am doubtful whether a manufacturer of same finished product, can do job work for others for same product in same manufacturing premises?

AI Summary

CENVAT credit eligibility questioned where plant is shut down and manufacturer performs job work for same product.
Question whether claimed CENVAT credit on purchased liquid carbon dioxide and conversion to dry ice while the plant is described as shut down is permissible, and whether a manufacturer of the same finished product may undertake job work for outsiders in the same premises; authorities may challenge credit availability during non operational status and may treat such activity as attracting excise liability on removals or as impermissible use of input credit.