Cenvat on goiods purchased

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2012 Please guide us,
-we are a manufacturing concern named XYZ Pvt ltd. Co.,

-We have two unit .No. I and No. II.

-Unit I receives inputs and removes as such that inputs to unit II...

-Then Unit II avails the cenvat on those inputs and uses those inputs for manufacturing the finished goods.

-These finished goods are sold to unit I by Unit II by paying the excise duty...

-On receipt of these goods in unit I , they avail the cenvat credit on these goods... and do a direct sale to the customer . without any further processing.

so my question is whether unit I is availing irregular cenvat credit ... as the goods are not input for themm.. they are only doing trading.

Sir kinadly give me the reply as early as possible..
its really a very serious issue for us.

Pankaj Patidar

Pankaj Patidar (Expert)
Follow

06 June 2012 CENVAT Credit Rules, 2004 provides various provisions for sending inputs / semi finished goods / finished goods outside for Job Work, testing etc. under rules 16A, Rule 16B and Rule 16C.

Rule 16A deals with 'Removal of goods for job work, etc.' for further processing, testing, repair, re-conditioning or any other purpose.

Rule 16B deals with 'Special procedure for removal of semi-finished goods for certain purposes.' for carrying out certain manufacturing processes.

Rule 16C deals with 'Special procedure for removal of excisable goods for carrying out certain processes.' for carrying out tests or any other process not amounting to manufacture.

jobwork Rule 4 (5) (a) of the Cenvat Credit Rules 2004