Raw-materials sent directly at Job-worker premises

[Pradeep Jain]

Dear Sir,

To avoid the  exra transportation cost , we have been sending the rawmaterials from suppliers primises to Jobworker Premises  without mentioning delivery to consignee(Jobworker) because either the Job worker in not registered under Central Excise or not willing to avail CENVAT Credit on our Rawmaterial .

After getting the raw-materials , Jobworker sends us our  Suppliers Excise Invoice. On the basis of acknowledgement given by our Job-worker the same Rawmaterials theoritically entered in our books GRN is prepared and CENVAT is availed.  After that retunable challan is issued by us under rule  Cenvat Credit Rule, 2004 u/r 4(5)(a). In that case  date of preparation of GRN  and the Challan ,of  the above said goods acknowledgd by our Jobworker , becomes late 6-7 days.

Is it appropriate procedure ? Kindly advice.

Regards

Pradeep Jain

[KALYAN CHAUDHARY]

Dear Sir,

Yes you can send the material direclty to Job work permises for further processing but you don't take the cenvat cr. without material.you can take the cenvat cr. when you have received the processed material to  your factory permises. you can raise the excisbale challan under rule 16A of CER, 2002 or notification No 17/2003-CE(N.T) dated 13.03.2003 from the factory of supplier to the factory of job worker for further process and subsequent return to the parent factory.

With Regards

Vipan Kumar

AI Summary

Company Delayed in Processing CENVAT Credit; Advised to Use Excisable Challan Under Rule 16A or Notification No. 17/2003-CE(N.T) A company is sending raw materials directly from suppliers to a job worker's premises to save on transportation costs, without listing the job worker as the consignee. The job worker is not registered under Central Excise and does not wish to avail CENVAT Credit. After receiving the materials, the job worker sends the supplier's excise invoice back to the company, which then records the goods and avails CENVAT Credit. The company issues a returnable challan under Cenvat Credit Rule, 2004, but there is a delay of 6-7 days in processing. The response advises that CENVAT Credit should only be taken once the processed materials are received back at the company's premises and suggests using an excisable challan under Rule 16A of CER, 2002 or Notification No. 17/2003-CE(N.T).