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Cenvat query

Pinky Agarwal (Chartered Accountant) (426 Points)

22 October 2011

Dear Sir,

'Coal India Limited' is charging ED @ 5% on coal. Such coal is purchased by a first stage dealer say (A) and same is loaded in truck from 'Coal India Ltd. mines and supplied directly to end consumer (B). Further, 'Coal India Limited' is not mentioning end consumer's (B) name in their bill.

In this regard, please suggest on the following issues:

1. Whether “B” can take Cenvat credit, as the name of “B” is not mentioned in the bill of “Coal India Limited”?

2. Whether Cenvatable invoice can be issued by “A” to “B”, as the goods were directly dispatched from Coal India Ltd to buyer?

3. What should be the correct procedure in present case?

Regards,

Pinky Agarwal.

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8 Replies

ACCOUNTANT (Student) (559 Points)
Replied 22 October 2011

According the question...A is holding the position of a dealer....as an intermediary ....so he can issue a cenvatable invoice....and B can claim cenvat credit on provided he satisfies other conditions......

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 24 October 2011

A has to take dealer registration under Central Excise and issue invoices in specified format , maintain records and file quarterely return. Then invoice issued by a is a cenvat document.

1 Like

CA Nitin Karmalkar (Senior Associate) (70 Points)
Replied 24 October 2011

Dear Pinky

1. Whether “B” can take Cenvat credit, as the name of “B” is not mentioned in the bill of “Coal India Limited”?

ANS: No. B cannot take cenvat credit if invoice is not in the name of him.

2. Whether Cenvatable invoice can be issued by “A” to “B”, as the goods were directly dispatched from Coal India Ltd to buyer?

ANS: Yes. For this A has to take Dealer Registration under Excise Rules. After this he can pass cenvat to B.

3. What should be the correct procedure in present case?

ANS: Procedure can remain same if A avails registration.

1 Like

Kishor Darole (Assistant Manager- Excise/Customs) (343 Points)
Replied 29 October 2011

---> If the material is directly loaded from the Mfg-Coal India Ltd, Invoice should mention the name of end consumer (B), else Invoice should be in the name of first stage dealer (A) OR Invoice consignee should be A and Delivery at B, in this case B can take Cenvat credit.

In this regard, please suggest on the following issues:

1. Whether “B” can take Cenvat credit, as the name of “B” is not mentioned in the bill of “Coal India Limited”?

---> No, B can not take cenvat credit if his name is not mentioned.

2. Whether Cenvatable invoice can be issued by “A” to “B”, as the goods were directly dispatched from Coal India Ltd to buyer?

---> Yes, A can issue Cenvat Invoice because first stage dealer is always & must be under Excise.

3. What should be the correct procedure in present case?

---> As mentioned in above para.

Hope this should clear to you.

Regards

Kishor Darole

1 Like

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 01 November 2011

Can anyone explain me the concept of Endorsement of Invoice Under Central excise??

Regards,

Pinky Agarwal

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 01 November 2011

Originally posted by : Pinky Agarwal
	Can anyone explain me the concept of Endorsement of Invoice Under Central excise?? Regards, Pinky Agarwal

Prior to 30-03-1994, there was system of Gate Pass, for clearance of dutiable goods from the factory of manufacture, and those were had to get "pre authenticated" by the inspector of excise.

Those gate passes were endorsable by the dealer, for pass on of duty to the next buyer,

with introduction of invoice system and dealer's registration, the old endorsement system got dispensed. and right now its not in existance, only a registered dealer can issue invoice for cenvat purpose, endorsement is total outdated.

Kishor Darole (Assistant Manager- Excise/Customs) (343 Points)
Replied 02 November 2011

Hi,

There are two seperate concepts :- 1) Pre-Authentication under Rule 11--- as righty said above, it is not requried as per updated changes in the Rule.

2) Endorsement on Excise Invoice :- is requried if any corrections is done manually on the face of the said Invoice. It should be signed by the Authorised Person of the company with round seal.

It is required only if correctionns are done in the Invoice.

For more clarity, you may please elaborate your query.

Regards,

Kishor Darole

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 07 November 2011

I agree with Mr.Kishor Darole sir,

1. If the goods cleared directly from manufacturing unit, Invoice should be raised in the name of B. or mentioned both address buyer address A and delivery/consignee address B

2. If A is a registered dealer with excise, can pass the cenvat credit amount to B with his invoice, which is taken at the time of purchase

B can take the credit with statisfy any one of the above condition.