Cenvat credit availability

[Guest]

we have purchase a furnace oil for our finished goods for heat treatement. also we are use that furnace oil for our job work or labour charge materials we shall take full credit of that furnace oil invoice. shall we debit the duty the furnace oil we shall use for job work materials.

[Madhukar N Hiregange]

In my view the quantity of furnace oil you use for the manufacture of products recived for job work under rules 4 (5)(a)/ Not 214/86 would also be eligible for the credit. Other quantities used for the cusotmers who do not pay excise duty on the manufactured/ traded products would however have to be reversed.

AI Summary

Cenvat credit availability: furnace oil used in manufacture and job work qualifies, but supplies to non-excise-paying customers require reversal. Availability of Cenvat credit on furnace oil used as input fuel is recognized for quantities consumed in the manufacture of goods, including manufacture performed on goods received for job work; however, quantities consumed for goods supplied to customers who do not pay excise duty must be reversed so that credit is confined to usage connected with taxable outputs.