Job work reg.

[vinay wakde]

We are manufacturer of Liquid Carbon Dioxide & Dry Ice which is by products of our main plant i.e. Sponge Iron. Our production of Sponge Iron is presently stopped.  To meet the requirement of our customers for Dry Ice, we intend to receive Liquid Carbon Dioxide (Free issue for job work) under cover of Excise Invoice with charging 12.36% Excise duty & VAT @ 5%. On receipt of material we shall be taking benefit of CENVAT of Excise duty & VAT. The receipted liquid Carbon Dioxide is used for processing / job work of Dry Ice.

The finished goods i.e. Dry Ice is sent back to the same supplier by raising our Excise Invoice with charging Excise duty 12.36% on value of material (i.e. cost +VAT+ Tpt. charges + our value addition) and also charging the VAT.

Kindly let us know whether we are following the correct procedure for job work? or any other procedure to be followed to meet the requirement of our customer during stoppage of our production. Kindly also guide us whether the Department take objection for above transaction.

Regards,

VINAY

 

[YAGAY andSUN]

This query has been replied earlier.

Since you are paying the applicable excise duty on the goods while removing, as far as my knowledge goes, there should not be any issue in the near future.

You may disclose all the material facts to the commissioner of Central Excise for getting the clarification on this matter or you may adopt the path of Advance Ruling.

AI Summary

Excise duty compliance: paying duty on job work removals supports free issued inputs and CENVAT credit, seek advance ruling. Manufacturer will accept free issue liquid carbon dioxide under excise invoice, pay excise duty and VAT on receipt, claim CENVAT and VAT credits, process the material into dry ice, and return finished goods to the supplier under excise invoice charging excise duty and VAT on value including material cost, VAT, transport and value addition. Advisory: paying applicable excise duty on removal should prevent issues, but disclosure to the commissioner or seeking an advance ruling is recommended.