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Procedure for Job Work under Rule 4(5)(a) made assessee friendly

Central Excise - By: - Pradeep Jain - Dated:- 2-3-2015 Last Replied Date:- 30-12-1899 - Introduction:- The Budget 2015 has made amendments that that seeks to simplify the procedural aspects and put an end to the flimsy issues that have led to litigation in the past. One such issue that was frequently disputed by the revenue authorities was the availment of cenvat credit on the inputs/capital goods directly sent to a job worker without their being first brought to the premises of the manufacturer .....

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d even if any inputs or capital goods as such or after being partially processed were sent to job worker for further processing, testing, repair, re-conditioning (or for the manufacture of intermediate goods necessary for the manufacturing of final products) or any other purposes, and it was established from the records, challans or memos or any other document produced by the manufacturer or the provider of output service, taking the cenvat credit that the goods are received back in the factory .....

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AT credit again when the inputs or capital goods were received back in his factory or in the premises of the provider of output service. Accordingly, there was combined provision for inputs and capital goods for processing on job work. However, the above referred Rule 4(5)(a) has been substituted vide the Budget, 2015. The substituted Rule 4(5)(a) reads as follows:- (a) (i) The CENVAT credit on inputs shall be allowed even if any inputs as such or after being partially processed are sent to a jo .....

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ufacturer or the provider of output service, as the case may be, within one hundred and eighty days of their being sent from the factory or premises of the provider of output service, as the case may be: Provided that credit shall also be allowed even if any inputs are directly sent to a job worker without their being first brought to the premises of the manufacturer or the provider of output service, as the case may be, and in such a case, the period of one hundred and eighty days shall be coun .....

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the CENVAT credit that the capital goods are received back by the manufacturer or the provider of output service, as the case may be, within two years of their being so sent: Provided that credit shall be allowed even if any capital goods are directly sent to a job worker without their being first brought to the premises of the manufacturer or the provider of output service, as the case may be, and in such a case, the period of two years shall be counted from the date of receipt of the capital g .....

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e may take the CENVAT credit again when the inputs or capital goods, as the case may be, are received back in the factory or in the premises of the provider of output service. Implications of amendment:- Following are the effects of the amendment made in the job work procedure:- 1. Earlier, there was common rule for inputs and capital goods being sent for job work and the time limit for both was specified as 180 days. But now there is separate provision for both. This change has been made probab .....

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has been increased from 180 days to 2 years. This may be for the reason that the capital goods are required for a longer duration then inputs. 2. The provisions regarding receipt of inputs and capital goods directly by the job worker has been introduced in the amended Rule. Though there were no such provisions in the earlier Rule but there were circulars which allowed the movement of inputs/capital goods directly to the premises of the job worker. In this regard, reliance may be placed on the Ci .....

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