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

Cenvat credit timing: credit allowed only upon receipt of processed goods; excisable challan can cover job work movements. Direct dispatch of inputs to a job-worker is permitted, but cenvat credit cannot be availed until the principal receives the inputs back and records them (GRN). Movement and return should be documented by a returnable/excisable challan under the excise challan mechanism to validate transfers for job work and ensure credit is taken only upon lawful receipt.