27 August 2011
A MATERIAL BY WEIGHT CONTAINS 40% MOISTURE AS DISCLOSED IN INVOICE. THIS QTY. OF MOISTURE IS LOST IN PRODUCTION. HENCE PRODUCTION YIELD IS LOW.FOR PRODUCT VALUATION THE INVOCIE RATE IS TAKEN IN CONSIDERATION. WILL THE CENVAT BE ALLOWED ON FULL INVOICE QTY.
however you have to make a representation to R/O in writing stating your manufacturing process chain and point of loss of moisture. Also make it clear that its normal in your production, R/O may initiate his willingness to verify the same in his presence under intimation to you. and would make suitable note in your file/ record in your favor.
This will help you to make things clear to visiting officers of audit and anti evasion.
CAclubindia
