Sir an assessee is opening a new business. He will be dealer and will export some part of its product out of India.
What is the best procedure through which CENVAT benefit can be availed by him:
1. By purchasing goods without paying duty OR
2. By payin
Dear Puneet, I am giving my suggestion asuming that the your dealer in question is a manufacturer. Exemption Notification No. 42/2001 – C.E. (N.T.) dated 26th June 2001 provides for for export (under bond) without payment of duty (except for exports to Nepal and Bhutan). therefore your client can export the goods without payment of duty provided he has to furnish bond. Now the question arises for the inputs. in this regard i am of the opinion that the client has 3 options. First-pay duty on inputs and utilize the same against the duty liabilty on the local sales(however this option is good enoughf only if output libilty is in sufficient amount. Second- Pay duty and and claim refund under Notification no. 21/2004 – C.E. (N.T.) dated 6th September 2004. Third - procure inputs without payment of duty under Notification no. 43/2001 – C.E. (N.T.) dated 26th June 2001. Among all the options, to my mind if their is suffcient duty liabilty against the local clearance one sholud go for option one. in any other case should go for option three because in case of refund we all know it will take a lot of time in follow up with the department for the refund and i guess you are very well aware with the expenses to be incurred in reltion with the refund.........................
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