Subject – a machine part sending for repairing

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prashant (Querist)
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09 December 2011 Dear Sir
We have procured a machine from China & we have availed Excise Credit for the same.
After one year a part of the machine got damaged & need to repair with Local Vendor.
We have raised returnable gate cum challan for the same.
Pl. suggest whether we need to prepare 57f4 Challan for this & what is the amount to be shown on this.

Guest

Guest (Expert)

10 December 2011 In terms of Rule 57F(4) the inputs can be removed as such or after they have been partially processed to a place outside the factory under cover of a challan, for the purposes of test, refining, reconditioning etc. Rule 57F(6), however, requires that these goods can be so removed only after debiting an amount equal to ten percent, of the value of such goods, as declared on the challan. The amount so debited can be credited back when these goods are received back the factory.

The "amount debited" under Rule 57F(6) is not a payment of 'specified duty' by is only debit of an amount. Similarity, the "credit" of such amount taken under Rule 57F(7) when the goods are received from the job-worker is only credit of this "amount" and not the credit of duty. Further, the challan on which goods are removed under Rule 57F(4) is not a document specified under Rule 57G (3) for the purpose of taking credit of duty and hence when the goods are received back under Rule 57F(6), the credit is not allowed under Rule 57A but under 57F (7) as the Credit of amount debited under 57F (6).

prashant

prashant (Querist)
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13 December 2011 Dear Sir, Thanks for your reply. But i have little get confused on this.

We have procured a machine of Rs. 100000/- against excise duty of Rs. 10300/- which have availed in RG23C account. Now if a part of that machine not in a working condition after 6 -7 months & needs to be send for repairing purpose to LOcal Vendor. Kindly give the details documentation procedure in this. I would appraciate your speedy reply.

2nd question - We have procured some magnesium of 1 kg = value of Rs. 60000/- against duty of Rs. 6180/- & availed credit in RG23A. We need to send a small qty like 400 gm of magnesium to a Laboratory to carried out the test. Kindly let me know the documentation procedure for this.

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Guest

Guest (Expert)

13 December 2011 1. As prescribed in Rule 57(f)4, the Challan will be for 10% of the estimated price of the part which can be ascertained from the supplier.

2. The same Rule 57(f)4 applies, but being a raw material sent for testing, you need not add any value in the Challan.

prashant

prashant (Querist)
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13 December 2011 It mean sir i have to prepared annexure by mentioning the value of Rs. 10,000/- . Pl. confirm it sir !!

As suggested by you in point no. 2. being a raw material for testing there is no need to add value. So it mean we have to send annexure for this. But the raw material qty which will send for testing won't be back. it will get consumed in the laboratory. So, it is this is procedure as per the law. Bcoz we are availing duty credit & sending sample to lab without payying the duty. Also pl. confirm once again whether we needs to raise annexure for this.

Guest

Guest (Expert)

13 December 2011 1. If the part cost is Rs. 10,000/- of the entire machine cost of Rs. 1,00,000/- as per Rule 57(f)4, the value on the challan will be 10% of the part cost i.e Rs. 1,000/- only.

2. Prepare the challan to accompany the material for testing to the laboratory.

prashant

prashant (Querist)
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14 December 2011 1. In this whether we need to debit of Rs. 1000/- in our RG23C account or not.

2. Which challan we needs to prepare pl. send the format if you have the same.

Guest

Guest (Expert)

14 December 2011 1. Rs. 1,000/- will be debited to RG23C when the part goes out for repair and RG23C will be credited back by Rs. 1,000/- when the part is returned back duly repaired by the local vendor.

2. Please ask your Excise Duty consultant to provide you with the format of Challan 54(f)4.

PS : This query is resolved; no further replies will be provided.

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