Availing cenvat credit

This query is : Resolved

Varadarajan Seetharaman (Querist)
Follow

25 November 2015 Scenario:

We have outsourced the manufacturing of our product to two vendors.

Stage 1

Vendor One would manufacture raw material X and would sell it to us with Excise Duty.

Stage 2

We would supply the raw material Y to Vendor 2 for manufacture of Final Product.

Question

Is it possible to set off the Cenvat Credit availed from Vendor 1 for payment of excise duty to Vendor 2?

Arun Kumar Singh

Arun Kumar Singh (Expert)
Follow

25 November 2015 Yes vendor 2 can pay the duty from cenvat credit taken on invoice issued by vendor 1 but the process should be amounts to manufacture.