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Cenvat Credit on dealer invoice

Jaypal Gupta (Director) (24 Points)

13 December 2010

Z is a manufacturer. They purchase goods from a dealer Y who in turn purchased goods from another dealer X. X has bought goods from a manufacturer [M] and Cenvat is availed by Z on invoice issued by X. X mentions Y in the buyer column and Z in the consignee column. The entire consignment comes directly from M to Z. Can Cenvat credit be disallowed to Z as the buyer column and consignee column differ. This query is being raised in view of comments in ELT page A135-136 which states Vol 259 which states that bouer and consignee should be same. Can credit be disallowed to Z in view of him being a manufacturer?

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1 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 13 December 2010

M . manufacturer issue invoice to X (1st stage dealer)
X . 1st stage dealer issue dealer's invoice to Y ( 2nd stage dealer)
Y . 2nd stage dealer issue dealer's invoice to Z ( final manufacturer)
though the whole consignment is delivered from M to Z directly, X only is the buyer of M , consigneee may differ
Z can take credit on strength of dealers invoice of Y only, M or X is out of his view, its only entry in dealers invoice which is carried forward to Z ultimate.