CBEC - Please Listen; Please spare us of 'registration' - Rule 11 of CER, 2002
WE received this mail from an assessee -
By Notification No. 8/2015-C.E. (N.T.), dated 1st March 2015, the following proviso is added to Rule 11(2) of the Central Excise Rules, 2002.
"Provided also that if the goods are sent directly to any person on the direction of the Registered dealer, the invoice shall also contain the details of the registered dealer as the buyer and person as the consignee, and that person shall take Cenvat credit on the basis of the registered dealer's invoice".
It has been misinterpreted by the field formations to state that all are required to take "Dealers" Registration who ever orders goods on the manufacturer and directs the manufacturer to send the goods to ultimate user directly. We are of the opinion that this is certainly not the intention of the amendment at all.
In our type of "turnkey business", we order goods on our suppliers and the goods are directly dispatched in the name of our customer on "Sale in Transit basis". Our customer takes CENVAT credit based upon manufacturers invoice. As per our understanding, the system will continue even after the above amendment.
We are not a dealer in a literal sense like others who are authorized dealers to sell goods manufactured by the manufacturers. If we are forced to take "Dealer" Registration, we have to obtain registration throughout India only for limited purpose of issuing Cenvatable invoice, which will affect smooth flow of our business transactions and also increase transaction costs.
Any amendment in law needs to ease the doing of business and not hamper or complicate the doing of business. Infact, to remove the doubt aired earlier, when the dealer excise invoice commenced, the Board was kind enough to render the following clarifications viz. Board's Circular No. 96/7/95-CX dated 13th February, 1995 read with further circular No. 218/52/96-CX dated 4th June, 1996 that whenever "Sale in Transit" happens i.e., when an un-registered dealer" places an order on the "Manufacturer" and goods are despatched directly by the manufacturer on behalf of the un-Registered Dealer to the ultimate recipient, then the recipient is allowed to take Cenvat Credit based upon "Manufacturers" invoice, so as to rest the issue and give comfort to the trade.
Our customers are apprehensive that CENVAT credit will be denied by their jurisdictional authorities and are, therefore, pressing upon us to go in for "registration" failing which they would be cancelling our contract.
We understand that TIOL has already carried an article in its ST se GST tak column a few days ago but would like to through DDT make the Board aware the disastrous effect its notification is causing to the business community.
If the Board is sincerely interested in fulfilling the Prime Minister's vision of Ease of Doing business & Make in India, it should come out with a clarification negating the field view, which we are confident it will, since it may not wish to throttle the already nervous manufacturing sector.