Cenvat credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 October 2012 Since First Stage & Second Stage Dealer Can pass The CENVAT Credit Right ?

Now A Ltd. Imported Goods, & Made HighSeas Sale to B Ltd.
B Ltd. Sold to C Ltd.
Cltd to D Ltd.
Who is The First & Second Stage Dealer in This Case.
Can They Pass on Excise Duty Credit

Rama Krishnan

Rama Krishnan (Expert)
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25 October 2012
HIGH SEA SALES ARE THOSE SALES WHICH ARE DONE OUTSIDE THE TERRITORY OF INDIA, MEANS THE GOODS ARE SOLD WHILE ON HIGH SEA, ONLY THE FINAL HSS BUYER WILL PAY THE CUSTOMS DUTYCUSTOMS CLEAR THE GOODS.

IN SUCH CASE A,B,C HAVE SOLD THE GOODS ON HIGH SEA NOR THEY HAVE PAID CUSTOMS DUTY AND CLEARED THE GOODS, ONLY THE FINAL BUYER D WHO HAD CUSTOMS CLEARED THE GOODS POST PAYMENT OF DUTIES, SO D WILL BE THE FIRST STAGE DEALER IN THIS CASE AND D CAN PASS ON CENVAT CREDIT.

Querist : Anonymous

Querist : Anonymous (Querist)

25 October 2012 & After Say D Clear by Paying Duty and D Sell to E as MODVAT Bill Then E is Secind Stage Dealer.
Now E Sold to F Then Can E pass Credit to F (F is Manufacturer).
Since E is Second Stage Dealer

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Rama Krishnan

Rama Krishnan (Expert)
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25 October 2012
PL CHECK BELOW DEFINTION OF FIRST STAGE DELAER AND SECOND STAGE DELAER IN ENCLOSED CIRCULR.

IF D IS IMPORTING THE GOODS, THEN E BECOME THE FIRST STAGE DELAER, F BECOMES THE SECOND STAGE DEALER..

CENVAT CREDIT CAN BE PASSED BY BOTH FIRST AND SECOND STAGE DEALERS.

DO REVERT IN CASE OF ANY QUERY..

CENVAT CREDIT RULES, 2004
[Notification No. 23/2004-C.E. (N.T.) dated 10.09.2004 as amended by
24/2004-C.E. (N.T.) dated 17.09.2004, 38/2004-C.E. (N.T.) dated 25.11.2004,
03/2005-C.E. (N.T.) dated 28.01.2005, 13/2005-C.E. (N.T.) dated 01.03.2005,
22/2005-C.E. (N.T.) dated 13.05.2005, 27/2005-C.E. (N.T.) dated 16.05.2005,
28/2005-C.E. (N.T.) dated 07.06.2005, 06/2006-C.E. (N.T.) dated 20.03.2006,
08/2006-C.E. (N.T.) dated 19.04.2006, 10/2006-C.E. (N.T.) dated 25.04.2006,
19/2006-C.E. (N.T.) dated 30.09.2006, 31/2006-C.E. (N.T.) dated 30.12.2006,
07/2007-C.E.(N.T.) dated 21.02.2007, 10/2007-C.E.(N.T.) dated 01.03.2007,
19/2007-C.E.(N.T.) dated 09.03.2007, 24/2007-C.E.(N.T.) dated 25.04.2007,
27/2007-C.E.(N.T.) dated 12.05.2007, 32/2007-C.E.(N.T.) dated 03.08.2007,
33/2007-C.E.(N.T.) dated 07.09.2007, 35/2007-C.E.(N.T.) dated 14.09.2007,
10/2008-C.E. (N.T.) dated 01.03.2008, 35/2008-C.E. (N.T.) dated 24.09.2008,
48/2008-C.E. (N.T.) dated 05.12.2008, 50/2008-C.E. (N.T.) dated 31.12.2008,
16/2009-C.E. (N.T.) dated 07.07.2009, 22/2009-C.E. (N.T.) dated 07.09.2009,
and 6/2010-C.E. (N.T.) dated 27.02.2010]

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994) and in supersession of the CENVAT Credit Rules, 2002 and the Service Tax Credit Rules, 2002, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:-

Rule 1. Short title, extent and commencement ---(1) These rules may be called the CENVAT Credit (Amendment) Rules, 2010.
(2) They shall come into force on the date of their publication in the Official Gazette.

Rule 2. Definitions. - In these rules, unless the context otherwise requires,-
(a) "capital goods" means:-

(A) the following goods, namely:-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof; and
(vii) storage tank, used-
(1) in the factory of the manufacturer of the final products, but does not include any equipment or
appliance used in an office; or
(2) for providing output service;
(B) motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;

(b) Customs Tariff Act" means the Customs Tariff Act, 1975 (51 of 1975);
(c) "Excise Act" means the Central Excise Act, 1944 (1 of 1944);
(d) "exempted goods" means excisable goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty;
(e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act;
(f) "Excise Tariff Act" means the Central Excise Tariff Act, 1985 (5 of 1986);
(g) "Finance Act" means the Finance Act, 1994 (32 of 1994);
(h) "final products" means excisable goods manufactured or produced from input, or using input service;
(ij) "first stage dealer" means a dealer, who purchases the goods directly from,-
(i) the manufacturer under the cover of an invoice issued in terms of the provisions of Central Excise Rules, 2002 or from the depot of the said manufacturer, or from premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, under cover of an invoice; or
(ii) an importer or from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice;
(k) "input" means-
(i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as
packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production;
(ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service;
Explanation 1.- The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever.
Explanation 2.- Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; but shall not include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods;
(l) "input service" means any service,-
(i) used by a provider of taxable service for providing an output service; or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and
training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;
(m) "input service distributor" means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be;

(n) "job work" means processing or working upon of raw material or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for aforesaid process and the expression "job worker" shall be construed accordingly;
(na) "large taxpayer" shall have the meaning assigned to it in the Central Excise Rules, 2002.
(naa) “manufacturer” or “producer” in relation to articles of jewellery falling under heading 7113 of the First Schedule to the Excise Tariff Act, includes a person who is liable to pay duty of excise leviable on such goods under sub-rule (1) of rule 12AA of the Central Excise Rules, 2002;
(o) "notification" means the notification published in the Official Gazette;
(p) "output service" means any taxable service, excluding the taxable service referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, provided by the provider of taxable service, to a customer, client, subscriber, policy holder or any other person, as the case may be, and the expressions ‘provider’ and ‘provided’ shall be construed accordingly;
(q) "person liable for paying service tax" has the meaning as assigned to it in clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994;
(r) "provider of taxable service" include a person liable for paying service tax;
(s) "second stage dealer" means a dealer who purchases the goods from a first stage dealer;
(t) words and expressions used in these rules and not defined but defined in the Excise Act or the Finance Act shall have the meanings respectively assigned to them in those Acts