Movement of Input under cenvat Rule 4(5) (a), Central Excise

[SURYAKANT MITHBAVKAR]

We procured machine from our vendor but that vendor is not registered under Excise Act so Motors and Gear Box require for that manufacturing machine we are buying in our name and availed cenvat credit and therafter we send that Motor and Gear Box under Challon 4(5) (a) to that vendor for assembled that machine. In Challon we are stating purpose is Trial Purpose. Pl. advice this process is correct or not

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[Mangesh Lokre]

Please refer the relevant rule 4(5)(a) of Cenvat Credit Rules 2004

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(5) (a) 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, ………………….

By this provision of rule, you can remove the inputs for processing, testing, repair, re-conditioning or for the manufacture of the intermediate goods. No where there is specify that the inputs are allowed to remove for Trial Purpose.

In your case, you are advised to remove the goods on Excise Invoice with payment of duty to your Non Excisable vendor and after the testing you may ask him to remove these goods on his challan with the same excise Invoice.

After receipt of the goods you may take the Cenvat Credit on your own Invoice.