Cenvat credit on foc material

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2014 can we take cenvat credit on Free of Cost Material received.

can we take Cenvat Credit on FOC Material Bill.

Please Cleared my Query...

CS M Pota

CS M Pota (Expert)
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06 January 2014 Yes,of course you can take.FOC means Free Of Cost not free of customs duty.

CS M Pota

CS M Pota (Expert)
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06 January 2014 Yes,of course you can take.FOC means Free Of Cost not free of customs duty.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2014 but excise officer said you have not paid any amount for foc material so you cannot take cenvat crredit on foc

CS M Pota

CS M Pota (Expert)
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06 January 2014 CENVAT is available on the duty payment basis and not on the Value payment basis.You may show that Value of Material is on FOC but duty is paid by you.Further the material should be used in the manufacturing process and should comply all other criteria of CENVAT CREDIT RULES.

Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2014 we are not paid duty to suppler.

CS M Pota

CS M Pota (Expert)
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07 January 2014 See what is basic requirement for claiming CENVAT:

1) Duty must be paid

2) There must be necessary duty paying documents
3) Except in exempted category the inputs must be used in the manufacturing process

I do not see any such provision in the central excise act or cenvate credit rules that only payer of the Cenvatable duty is eligible for claiming CENVAT Credit.

CS M Pota

CS M Pota (Expert)
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Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2014 supplier paid excise duty to govt. but not charged to us.

CS M Pota

CS M Pota (Expert)
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07 January 2014 My above reply say that you can claim CENVAT credit.It does not matter that duty is paid by the supplier but not charged to you but there must be duty paying CENVATABLE documents .

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Ajay Raghatate

Ajay Raghatate (Expert)
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25 February 2014 Cenvat Credit on FOC Material,
You have received the material on Invoice, and vendor charged excise Duty on that FOC Material, but they have mentioned on Invoice FOC "Free of Cost", and you have not to pay them against this supplies.
then you can not avail cenvat credit ag.this invoice.

CS M Pota

CS M Pota (Expert)
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25 February 2014 Dear Ajay

Can you give Section/Rule of Excise or Case Laws which prohibit claiming of CENVAT on FOC ?

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