[size=14][justify]Dear All,

Company KNC is doing job processing on behalf of company OMN. The job processing results in manufacture of excisable goods as defined under 2(f) of Excise Act. This will mean that the service tax is not attracted in the transaction. However, excise duty would become applicable and would be payable on clearance of materials from the site of KNC.

Querry is:

1. KNC would be required to make an invoice to remove the goods from its premises to the premises of OMN. Can it call that as a JOB PROCESSING EXCISE INVOICE?

2. KNC is bound to receive only job processing charges from OMN. Whether the invoice as referred to above needs to be accounted for in the books of accounts of KNC/OMN? Or can KNC raise a debit note, in addition to the invoice, and pass it on to OMN. The debit note would be accounted by KNC and OMN. Is this the practice being followed? How will the companies account for the same in CENVAT, in their books of accounts?

3. What would be the approximate bond amount that would be required under CENTRAL EXCISE (REMOVAL OF GOODS AT CONCESSIONAL RATE OF DUTY FOR MANUFACTURE OF EXCISABLE GOODS) RULES 2001 for duty free transfer of job processed materials? Whether a maximum of 25%, as required for executing a B1 bond would be sufficient?

Thanks for your valuble time.

Regards,

Anoop Padmakumar[/justify][/size]