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CENTRAL EXCISE (JOB WORK) RULES, 2004 !

By S Jaikumar & G Natarajan, Swamy Associates

UNFORTUNATELY,the very first Central Excise Non-Tariff Notification of the year 2004,

has given rise to so many questions and leaves one puzzled as to what was the purpose

behind the issue of this Notification. Let us examine further.

As per Rule 4 (5) (a) of the Cenvat Credit Rules (erstwhile Rule 57 F (4) ofthe Central Excise Rules, 1944) credit availed inputs can be removed, either as

such or after being partially processed, to the premises of job workers for further

processing, testing, repair, re-conditioning or any other purpose.

Rule 16 A already provides that any inputs can be removed as such, or after being partially

processed, to a job worker, for further processing, testing, repair, re-conditioning or any

other process, subject to the conditions prescribed by the Commissioner in this regard. The

reference here is to inputs, whether credit availed or not. (When no credit is availed on theinputs, what is the necessity for controlling their removal?)

The following interferences could be drawn from the above rules.

a) Finished goods cannot be removed under these Rules for the stated purposes.

b) The removal must be only for the specified purposes.

c) No permission from the department is required.

d) After the said processes, the final products can be cleared directly from the premises of

the job worker, after obtaining the permission from the Commissioner of Central Excise.

More than the above, Notification 214/86 provides for exemption for thegoods manufactured on job work basis.

Let us now see, what the new rules have provided for.

By virtue of Rule 16 B, the following provisions have been incorporated.

a) Excisable goods in the nature of semi-finished goods can be removed for

carrying out certain manufacturing process.

b) Permission from the Commissioner of Central Excise is required.

c) The goods can either be brought back to the parent factory or be directly

cleared from the place, to which the goods have been removed.

By virtue of Rule 16 C, the following provisions have been incorporated.

a) Excisable goods manufactured in a factory can be removed for carrying out tests.

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