Sending goods for job work as excise importer

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Nirav Kothari

Others

23 Points Posted on 29 November 2015

Dear Sirs,

If a company registers as excise importer/dealer, are we allowed to send goods for Job Work under Notification No. 214/86, where the liability of excise will be on us post job work completion?

Basically, we send goods to job worker, job worker manufactures them (wants duty liability on us) and we dispatch to eventual client from job worker factory, while charging ED on our invoice.

Is an excise importer allowed to do this? or does one need registration as excise manufacturer? Job worker wants us to take excise liability and wants their exposure to be only limited to manufacturing goods.

Please help!

Thanks

Replies (3)

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 29 November 2015

The fact that you supply the good, means that your are merely a raw material supplier. You need to do at least 1 process of intial or final stage to be considered as a manufacturer in normal course.

However the CCR allows for part of full job work.

There is however a 1 year permission under rule 4(6) fo the cenvat credit rules to remove goods directly from the job workers factory.

Not sure whether this transaciton can be done under Not 214/86. Maybe not.

Possibly a special pemrisison from Commissioner could be applied for to complete the transpaction if purely of supply and manufacture by others.