CA Vasant K. Bhat
1. In the Union Budget 2015-16, one of the amendments made to the Central Excise Rules, 2002 (CER) with effect from 01.03.2015 is as under:
“In the said rules, in rule 11, –
(a) in sub-rule (2), after the proviso, the following provisos shall be inserted, namely:–
“Provided further that if goods are directly sent to a job worker on the direction of a manufacturer or the provider of output service, the invoice shall also contain the details of the manufacturer or the provider of output service, as the case may be, as buyer and contain the details of job worker as the consignee:
Provided also that if the goods are directly sent 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 the person as the consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice:”
2. The Supplier of input dispatches material directly to the job worker(Consignee).
Prior to the amendment:
(a) In case, the job worker was discharging the excise duty on behalf of the manufacturer, then Consignee name A/c. the name of the manufacturer used to be mentioned in the excise invoice. Consignee used to take the cenvat credit on the basis of the excise invoice issued by the Supplier of input.
(b) If the manufacturer was discharging the excise duty, then the manufacturer used to send simultaneously the Jobwork Challan [AnnexureII/Challan u/r 4(5)(a)] to the job worker and after receipt of the goods from the jobworker, manufacturer would avail the cenvat credit.
In both the cases of (a) and (b) above, the excise invoice issued by the supplier of inputs shall contain the details of the manufacturer as ‘Buyer’ and the details of job worker as the ‘Consignee’.
3. The Supplier of input dispatches the material directly to any person as per the instruction of a dealer:
Prior to the amendment:
Whether the dealer was registered or not, the supplier used to send the materials directly to any person (consignee) mentioning the details of the dealer as buyer on whose instruction the materials are being sent. The consignee used to take the cenvat credit based on the excise invoice issued by supplier of input.
The supplier of input sends the materials to any person (consignee) directly as per the instruction of a registered dealer, the excise invoice shall contain the details of the registered dealer as buyer and details of the person to whom the materials are sent as consignee. Further, simultaneously, the register dealer shall issue excise invoice to the consignee and on the basis of this excise invoice of the registered dealer, consignee can take the cenvat credit.
4. In the absence of any amendment made to the Cenvat Credit Rules, 2004 in this regard, in such cases, the consignee shall have 2 cenvatable invoices, one from the supplier of inputs and other from the buyer. Therefore, the CBEC should issue a clarification to avoid this confusion by properly laying down a methodology for cenvat credit process. In my opinion, it is advisable for manufacturer to mention in the excise invoice a phrase that “Not for Cenvat. Cenvat Credit shall be taken on the invoice issued by the registered dealer”.
Further, in my opinion, the above amendment is not applicable where the dealer is not registered under central excise and cenvat credit to consignee should be available on the invoice issued by the supplier of materials when goods are directly supplied on the instruction of an un-registered dealer.