Circular No. 146/57/95-CX dated 12/9/95
Subject:Procedural relaxation regarding MODVAT Credit.
Representations have been received from the manufacturers that some of their
inputs on which modvat credit is taken by them have to be initially sent to another
manufacturer job workers) for a part of process and then return the same to the
manufacturers. For this purpose, the manufacturers clear the goods under Rule 57F(1)
(ii) on payment of duty. The job workers take themodvat credit and clear the products
manufactured out of said inputs on payment of appropriate amount of duty to the
manufacturer who had supplied the inputs to said )ob workers. It is represented that
this procedure entails avoidable expenditure on account of double transportation &
material handling, besides loss of time.
2. It has been suggested that to get over the difficulties inherent in the existing
procedure, the inputs could move directly from the supplier to the job workers without
being routed through them. The inputs could be consigned to the job workers directly
on account of such manufacturers as in the case of registered dealers.
3. The matter has been examined- Board had earlier issued the Circular Na. 96/7/95-CX
dated 13.2.95 clarifying that where a registered person places aa order on a
manufacturer for supply and delivery of goods directly to a consumer unit and the
goods are accordingly transported from the manufacturer"s premises without being
brought to the registered person, modvat could be availed by the end user in such
cases on the duplicate copy of manufacturer"s invoice issued under Rule 52A. This
invoice under Rule 52A will however contain, in addition to the prescribed details
including the consignee"s name and address mentioned therein, the registered person"s
name and addiens, on account of whose instructions, the goods havebeen dispatched. The
consignee in this case will be the end user (job worker).
4. It has been decided that the aforesaid circular shall apply Mutatis/Mutandis to
those cases also where inputs are supplied to a job worker under the instructions of
another manufacturer. In such a situation the consignee will be the job worker and
Invoice under Rule 52A, in addition to the prescribed details including the
consignee"s name and address will also bear the name and address of manufacturer on
whose instruction the goods have been so dispatched. The duplicate copy of the
manufacturer"s invoice under Rule 52A will serve as a cover for transport and for
availment of Modvat by the input user (job worker).
Sd/-
(Mallika Arya)
Under Secretary to the Government of India
F.No.267/II0/95-CXPresented by eximkey.com