Applicability and Liability of excise duty

[Guest]

My clients are engaged in job working. My query is as follows: Primary material is consigned by my clients customers. My clients add material inputs to it to make the final product. For every 100 kgs of material sent to my clients' for job work, my clients return 100 kgs of finished material which has additional inputs apart from the primary material consigned for job working. 1) Are my clients liable to excise duty on the material left balance with them even if their turnover has not crossed the excisable limit of Rs. 150 lacs? 2) Are my clients' customers allowed to take full modvat credit on final product received after processing of primary material? 3) The additional inputs are not provided by my clients customers. My clients purchase the same and also pay full excise duty on the same without availing any modvat credit. 3) Are my clients entitled to modvat credit on goods to be used for job working?

AI Summary

Clarification on Excise Duty and Modvat Credit for Job Work with Turnover Below Rs. 150 Lakhs; Principal's Duty Status Key A client engaged in job work processes materials provided by customers, adding their own inputs to create a final product. The client queries whether they are liable for excise duty on leftover materials if their turnover is below Rs. 150 lakhs, and if their customers can claim full modvat credit on the final product. Additionally, the client purchases additional inputs and pays excise duty without availing modvat credit, and seeks clarification on their entitlement to modvat credit for job working. The response suggests that options depend on whether the material supplier (principal) pays central excise duty.