Concept of 180 days/2 yeas in case of Jobworker

Rule 4(5)(a)

Goods first received by Manufacturer and then sent to Jobworker

We know that on receipt of goods by manufacturer, he immediately claims CENVAT on the same

However, if such goods are later sent to jobworker, they move out of factory

However no Excise duty is payable in such cases as per rule 4(5)(a)) of CCR, which says that Cenvat credit will be allowed on same if they are received back within 180 days/ 2 years in case of Capital Goods

The manufacturer has to maintain appropriate records to prove that these are received within the period of 180 days/2 years

Note:-

The Goods may be sent to Jobworker for any purpose like

• further processing,
• testing,
• repairing,
• re-conditioning or
• for the manufacture of intermediate goods necessary for the manufacture of final products

Goods Sent Directly to Jobworker

The credit can be availed even if any inputs or capital goods are directly sent to a job worker without their being first brought to the premises of the manufacturer/ output service

The period of 180 days or 2 years, will be counted from the date of receipt of such goods by the job worker

Goods Not Received Within 180 days/2 years

However, if they are received after 180 days/2 years, Cenvat taken on them need to be reversed

However, if they are later received after 180 days/2 years, still Cenvat can be retaken on these

Note:-The condition of return within 2 years is not in case of jigs, fixtures, moulds, dies.

This is because these are generally consumed during production

Hence, even if these are not received back within 2 years, still input available on the same

Effect of Amendment