Lalit Sangani (M.Com. Asst. Manager Account) (736 Points)
09 July 2012Dear All,
If one manufacture goods sale to a dealer where manufacture charged excise duty 12.36% and due to some causes dealer return good to a manufacturer after some days.
My question is that when dealer goods return to manufacturer than dealer will reverse excise duty saprately or he will include excise duty in goods rate.
whether above is ok than manufacturer will sale that goods again, that time manufacturer will has to paid excise duty again.
kindly clear my above query.
Ajit kumar Dubey
(Taxation Manager)
(637 Points)
Replied 10 July 2012
RENGARAJ R.K
(ADVOCATE)
(7557 Points)
Replied 10 July 2012
When the party returns the materials within the time period (shelf life or warranty period), the party's document showing the reference of excise chalan/invoice can be taken as CENVAT credit.
Yogesh Bansal
(AM at Apollo Munich Health Insurance)
(152 Points)
Replied 11 July 2012
Agree with ajit kumar dubey.............
Ajit kumar Dubey
(Taxation Manager)
(637 Points)
Replied 12 July 2012
RENGARAJ R.K
(ADVOCATE)
(7557 Points)
Replied 12 July 2012
It was in the cenvat rules, 2001. But in the current cenvat rules, i do not find any such limitation period. Please check up with the excise range. Kindly go thro the circular issued on the subject.
OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II
692 ANNA SALAI, NANDANAM, CHENNAI - 60 035.
TRADE NOTICE NO. 15 / 2002 DATED: 27.02.2002
Sub - CE - Re-entry / Retention of duty paid excisable goods in factory premises –
procedure under Rule 16 of Central Excise (No.2) Rules, 2001.
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With the introduction of the Central Excise (No.2) Rules, 2001 with effect from 01.07.2001, the law and procedure relating to receipt of duty-paid goods back into the factory for being re-made, refined, re-conditioned or for any other reason and re-despatch of the same from the factory after completion of the process, have been simplified.
Rule 16(1) of the said Rules provides that the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2001 and utilize the credit according to the said Rules. The goods received into the factory for repair, re-making, reconditioning etc. might have been produced or manufactured in the same factory or in some other factory.
Rule 16(2) of the said Rules provides that if the process carried out after receipt does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken. In any other case (where it amounts to manufacture), the manufacturer shall pay duty at the prevailing rate on the value determined under Section 3(2), 4 or 4A of the Central Excise Act, 1944.
Rule 16(3) of the said Rules provides that in the event of assessee facing difficulty, the Commissioner is empowered to resolve and permit the entry of goods. Board, in its supplementary instructions, has stated that the Commissioner may exercise his powers either on case to case basis by a special order or to be applied to a particular type of case by a general order and impose such conditions as may be necessary for safeguarding the interest of revenue.
Of late, this Commissionerate has received applications from assessees seeking permission to receive goods into their factory for being repaired, re-made, reconditioned etc either under a document based on which CENVAT credit cannot be availed in terms of the CENVAT Credit Rules, 2001 or without a cover of invoice prescribed under Rule 11 of the Central Excise (No. 2) Rules, 2001. For the benefit of those assessees, the following procedure is prescribed: -
(i) No prior permission is necessary to receive such goods. However, the assessee has to file with the Range Officer intimation within 24 hours (excluding holidays) of receipt of such goods. The intimation shall be as per format prescribed and enclosed as "ANNEXURE -I to this Trade Notice. In case the assessee is prevented from filing the intimation within the specified time for any reason, the jurisdictional Assistant or Deputy Commissioner may consider the case on merits for condonation of delay on an application.
(ii)The goods received shall be accompanied by a document at least Delivery Challan of the sender/consignor. The sender shall clearly mention in the challan the purpose for which the goods are returned to the assessee's factory.
(iii)The assessee shall receive the goods within one year from the date of clearance or warranty / guarantee period, whichever is later. However, for relaxation of this clause, the assessee will apply well in advance stating the reasons to the jurisdictional Assistant or Deputy Commissioner who will grant extension of time on being satisfied.
(iv)The assessee shall not be entitled to CENVAT credit, since the goods received have not been accompanied by valid duty paying document prescribed under the CENVAT Credit Rules, 2001.
(v)The assessee shall re-despatch the goods received within six months from the date of receipt of goods into the factory. The assessee shall issue invoice as per Rule 11 of the Central Excise (No.2) Rules, 2001 at the time of such re-despatch. The invoice shall be super-scribed "GOODS RETURNED AFTER REPAIR / ……………. PURPOSE". In case the assessee is not able to re-despatch the goods within six months of receipt of goods, he will apply well in advance stating the reasons to jurisdictional Assistant or Deputy Commissioner who will grant extension of time on being satisfied.
(vi)If the assessee, in the course of repair, reconditioning etc., adds or replaces parts or components etc from their own production or from inputs on which CENVAT credit was taken, he has to discharge duty or pay an amount equal to excise duty at the rate and value applicable as per relevant Rules. These added / replaced parts, components etc. may be incorporated in the same invoice or by a separate invoice as may be convenient to the assessee.
(vii)Where the process undertaken by the assessee amounts to 'manufacture' in terms of Section 2(f) of the Central Excise Act, 1944 read with Chapter / Section Notes of the Schedule to the Central Excise Tariff Act, 1985, the assessee shall pay duty and clear the goods under an invoice.
(viii)The assessee shall maintain records of receipt and disposal of such goods. The record shall be as per format prescribed and enclosed as ANNEXURE - II to this Trade Notice. Such receipt and disposal shall also be reflected in the quarterly / monthly returns being submitted to the Range Office.
(ix)Where assessee desires to bring in duty-paid goods of the kind manufactured in his factory, for purposes of stock and sale, he shall make an application to jurisdictional Assistant Commissioner / Deputy Commissioner who will forward the same to Commissioner with suitable recommendations for grant of necessary permission.
In case of further difficulties, the assessee may make an application stating the reasons to the jurisdictional Assistant / Deputy Commissioner of Central Excise who will forward the same to the Commissioner for granting prior permission.
Contents of this trade notice may please be brought to the notice of all concerned.
(Issued from file C.No.IV/16/196/2001-Tech)
(G.V.KRISHNA RAO)
JOINT COMMISSIONER (TECH)
Ajit kumar Dubey
(Taxation Manager)
(637 Points)
Replied 13 July 2012
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 13 July 2012
| Originally posted by : lalit | ||
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Dear All, If one manufacture goods sale to a dealer where manufacture charged excise duty 12.36% and due to some causes dealer return good to a manufacturer after some days. My question is that when dealer goods return to manufacturer than dealer will reverse excise duty saprately or he will include excise duty in goods rate. whether above is ok than manufacturer will sale that goods again, that time manufacturer will has to paid excise duty again. kindly clear my above query. |
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as a dealer has no direct nexus to the excise duty( except pass on of duty to next buyer) , he has to issue the invoice as like he issues to the next dealer/manufacturer , showing the cost value and excise duty as mentioned under the parent invoice of principal manufacturer..
manufacturer will take credit of same at par with other input invoices and would be avle to sell as it is condition or remanufacture as may be required.
Lalit Sangani
(M.Com. Asst. Manager Account)
(736 Points)
Replied 14 July 2012
Yes Mr. US Sharma you are right , in the condition of goods return dealer will make invoice to manufacturer where dealer pass on excise duty to manufacturer and manufacturer will get credit of excise duty and return material will add as a manufactured qty.
CAclubindia
