Modvat/cenvat claim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2013 Business now a days has become so much difficult due to the rising unreasonable demands from the factories and the mills.

Well, we are import house based in Mumbai. Importing raw material under Custom Tariff Ch. 72044900 ferrous scrap and others wherein the Custom Duty is 0% but Excise and SAD in total is approx. 17.36% (inc. of landing charges 1%) which itself is becoming a loss itself. The factories are demanding the material without excise bill and only want the Sales Tax bill.

For e.q.
We import goods at USD $400 (CNF value in INRs. 21600/MT) therefore
Rs. 21,600 Basic
+ Rs. 3,800 Excise & SAD
+ Rs. 1,200 clearing and other charges
----------------------
= Rs. 26,600 landing cost + CST/VAT as applicable.
# MODVAT available approx. Rs. 3,650/MT

But the factories and mills are asking the price of Rs. 26,500/MT + VAT/CST that too inc. of transport and doesn't want to pay the Excise neither they are interested for claiming the MODVAT. The Net Loss is Rs. 3,000/Mt approx. Whereas if I sell with bill our profit margin is not more then 500-800/MT.

Kindly please suggest me, what should be done in this extreme situation.

Regards,
Krunal
+91-9833698410