Excise benefit to customer from non excise registered dealer

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 16 November 2011

Dear Sir,

Noted your points.

You can register with excise as a dealer and can do the same process easily. This is the best way for your process. If you can get dealer registration, you should mentioned the manufacturer details in your dealer invoice also.

or

You can get invoice from your manufacture with your address as Buyer and your customer address as consignee. Based on that you can raise your invoice on your price and forward to your customer along with your manufacturer invoice. they can take credit based on the manufacturer invoice.

Both the cases, customer chance to know the manufacturer details.

2 Like

HS Negi (Senior Executive- F&A) (590 Points)
Replied 16 November 2011

Dear Rohit

There is only one method to route this transaction as mentioned below as per best of my knowledge:

When customer C has approched to dealer B with PO of required material. Then B may have approched to A Manfactured to dilever the material to C with billing mark to B under the method of Bill to and Ship to model. This sale is called E1 sale. In this condition, C Customer will take the cenvat credit on the invoice of A becuase as a consignee, the name of C along the excise particulars are mentioed in the invoice. As per excise rule, the consignee is the actual benificery to avail the cenvat credit. But C will be awared about manufacture A.

Because B is not registered in excise, if he procures the goods from A with bill to and ship to B then he can not pass the cenvat credit to C.:

Regards

HS Negi

ANIL NAIR (MANAGER - COMMERCIAL) (41 Points)
Replied 21 November 2011

If "B" purchase the material from "A" and bill to "C", then "B" becomesthe First Stage Dealer. As per Excise rules a manufacturer can avail the CENVAT credit on the basis of an invoice issued by a dealer who is registered in terms of the provisions of Central Excise Rules, 2002. In your case the dealer is not registered with Central Excise and hence the customer can't avail the credit of CENVAT against the invoice of the said dealer. There are some mandatory points to be mentioned on the invoices such as the Excise Registration number, Excise Range, Division, detils of the Manufacturer of the products, assessable value and duty charged by the manufacturer etc. Hence the dealer can't disclose the details of the customer.

The best way to save the Freight is, the dealer can get the invoice issued by the Manufacturer (A) directly to the consignee (C) showing the buyer as "B" and the Consignee as "C" - the customer.

or

The dealer should get himself registered with Central Excise. In both cases he should reveal the details of the manufacturer.

LALITH (acCOUNTS OFFICER) (43 Points)
Replied 24 July 2012

we received (as a consignee) a machinary from the manufactuer(A) directly through e1 sales-in which excise duty details was mentioned.and we received a bill from (B) to whom we have to make payment for the consignment.B also gave the invoice with all excise duty in his bill.can he rise the bill with excise duty for the E1 Sales.(B is registered manufactuerer under CE)

CA Abhishek Singh (practice) (2105 Points)
Replied 24 July 2012

No.

1. If delivery of goods are not taken then it cannot be called as purchase and therefore intermediary cannot be called as FSD since he is not taking delivery of goods.

2. since intermediary in case of transit sale is not a FSD therefore he cannot issue cenvatable invoice.

3. Credit will be given to the company ONLY on the basis of manufacturer invoice.

I request you to go through this artile published in TAXGURU WEBSITE.

https://taxguru.in/excise-duty/who-is-a-first-stage-dealer.html

Milind Diwalkar (Cost Accountant) (11 Points)
Replied 27 November 2015

Abhishek I am agree with your opinion, here B can ask to manufacturer to send the goods directly to C and mention as C is Consingnee issue the invoice u/s 52 then C can avail modvat on the same subject to satishfying the condition of FSD. & in this case billing should be done on the name of B.

1 Like

Vivek Vaish (CA Job) (47 Points)
Replied 18 February 2016

Sir,

Can a manufacturer sell the imported goods directly (without any manufacturing process) to its client with pass on the import duty credit to its client?

Manufacturer is not registered as a dealer under excise.

Please reply urgently.

Thanks,

Vivek

ANAND GUPTA (MANAGER) (24 Points)
Replied 28 March 2017

DEAR Sir ,

Please help :

A = Dealer or Trader of an item (who does not have excise registration )

B = also a Dealer or trader of same item (registerd in excise)

C= Manufacture company ((registerd in excise))

Now “C” deals with “A” by submitting an order and A supply material directly thru B, In this case A submitted our bill to C charging as actual amt of excise on invoice (mentioning excise gate pass) which is charged by B in his bill raised to mention as buyer A and mention consignee "C" and company C make the payment to A, and A make the payment to B.

now question is that A is not registered in Excise then can he pass on the excise amt. OR can "C" be take the credit of excise on the invoice of B. (because his name shown in invoice as consignee)

please suggest