I am confused at following transaction. Require your guidance.
Company A is a manufacturer who supplies Raw material to company B, also a manufacturer.
Company B sends some raw material to the jobworker’s premises directly from company A [Rule 4(5)(a)] and takes cenvat credit only after the material received in its premises after jobwork. This is to save the transportation cost. The jobwork process may/may not amounts to manufacture.
Now as some business strategy this arrangement is changed as under.
- Company A will supply raw material to company X “An Excise Registered Dealer”.
- Company “X” will then supply this material to company “B” on its Dealer Invoice.
This is basic and routine arrangement.
But how the material can go directly from company “A” to some jobworker and then sent to company “X” a registered dealer and then it can be finally supplied to company “B”.
Can “X”- the dealer, instruct “A” to put jobworker’s name & address as consignee and when material come after jobwork to “X”, he can enter it in its RG23D register and make invoice to company “B” ???
Is registered dealer allowed to send any material to jobworker for the process which does not amount to manufacture ??
CAclubindia
