Cenvat credit on free issued material

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This query is : Resolved

CA Sanjana arora (Querist)

22 March 2014 hiiiiiiiii,

A company has received free issued material for job work and the party who supplied the material has paid excise on that.therefore the receiving party has book the cenvat credit on it. but at the time of final supply no excise was paid by the party because it was a free issued material.

so what should be the treatment of cenvat credit book by the party.

pls suggest............

Arun Kumar Singh

Arun Kumar Singh (Expert)

22 March 2014 Entire duty paid by supplier-manufacturer is available as credit to user of inputs. But input should be used in the factory by the manufacturer of final product.

CA Sanjana arora

CA Sanjana arora (Querist)

22 March 2014 the material was received for jobwork. and when we dispatched the same no excise was charged as it was a free issued material.but cenvat credit has been taken of duty which was paid by the manufacturer...so what should be the treatment of that credit.........

Arun Kumar Singh

Arun Kumar Singh (Expert)

22 March 2014 If duty was not involved then cenvat credit can not be admissible. You should consult with any professional.

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