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Excise modvat

Harshita (CA FINAL STUDENT) (116 Points)

06 September 2014

sir,

please let me know in the following case,

A IS A MANUFACTURING UNIT REGISTERED IN EXCISE . A SELLS GOODS TO B , WHERE B IS A DEALER NOT REGISTERED IN EXCISE. B SELLS GOODS TO C , WHERE C IS REGISTERED IN EXCISE AND USE THE GOODS MANUFACTURED BY A AS RAW MATERIAL.

A SELLS GOODS TO B , ISSUES INVOICE IN THE NAME OF B BUT DELIVERY ADDRESS AT C FACTORY. B ALSO ISSUE HIS INVOICE IN THE NAME OF C AND ATTACH THE BILL OF A ALONG WITH.

NOW WHETHER C IS ELIGIBLE FOR EXCISE MODVAT.

NOTE : B IS NOT REGISTERED IN EXCISE , WHETHER MODVAT CAN BE TRANSFERRED VIA B, IF JUST DELIVERY ADDRES IN BILL IS OF C FACTORY

THANKS IN ADVANCE

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3 Replies

CA Ashish K Bansal (partner) (175 Points)
Replied 06 September 2014

Yes provuded in excise invoice issued by a to b c is mentioned as consignee and b as buyer further trans port copy of a s invoice should be sent to c this concept us known as transit sales in excise

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 09 September 2014

Definately yes. Absolutely agreed with Ashish.

Option 1- C can take cenvat credit based on transporter copy of excise invoice with c's name as consignee and B as buyer.

Option 2- If A keeps B's name as consignee and buyer on invoice, then in order to take cenvat credit by C, B must be a registered as excise dealer to pass on cenvat credit. B Has to raise invoice in compliance with Rule 11 of Central Excise Rules.

Thanks and Regards,

Manoj B. Gavali