Can a Job worker send received goods for further job work?
RULE 4(5)(a) of the CENVAT Credit Rules states,
The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning, or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or provider of output service taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not received back within one hundred eighty days, the manufacturer or provider of output service shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the CENVAT credit or otherwise, but the manufacturer or provider of output service can take the CENVAT credit again when the inputs or capital goods are received back in his factory or in the premises of the provider of output service.
“A” receives goods from “B” under Rule 4(5) of CENVAT Credit Rules, 2004 for processing. “A” wants to get these goods partly processed from “C” . Whether “A” can do so without inviting any excise liability?
This was a question asked by an assessee in a Regional Advisory Committee (RAC) Meeting recently.
The RAC Members suggested that the earlier provision prescribed for movement of goods from one processor/job worker to another processor/job worker (Annexure - III) under Circular No. 33/33/94-CX.8dtd. 04.05.1994 may be continued.
The Chief Commissioner promised to refer the matter to the Board with the suggestion of the Members.
The Board may take a couple of years to issue a clarification. Until then, what to do? Wait.