We are manufacturer and supply the goods out of state, now the goods is return by the party after 1.5 years, What is the effect to the books of account in excise for modvat ?, How the material is to be lift back with what procedure?, We have also paid the CST in our state, now the CST is refundable or not. Whether we can also demand the C-Form from the party for our material?. Please reply us for these.....
15 Replies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 03 June 2011
any return transaction can not be validated after 180 days, except the strike/ and naturial riots.
Dilip Patel
(Director)
(71 Points)
Replied 04 June 2011
Sorry the goods is return by the party within 5 months. so please reply for the above my queries.
Mallikharjun
(Deputy Manager)
(304 Points)
Replied 04 June 2011
First of all, why the party has returned your goods? If it is for repair or reconditioning, rule 16 under Central excise Rules, 2002 will help you. The rule says.
RULE 16. Credit of duty on goods brought to the factory. — (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, 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, 2002 and utilise this credit according to the said rules.
(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.
[Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.]
(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.
Pls go through the above rule. But law under CST is different.
Amit
(Accountant)
(261 Points)
Replied 04 June 2011
Thanks.
If the manufactured goods were received back for repairs, and, if the repairs does not amount to manufacture, then will it be possible to send the repaired goods to party without invoice?
I want to know the paper work (challan /letter) for returning the goods to party as it will not be able to make any invoice as no amt is receivable.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 June 2011
| Originally posted by : Amit | ||
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Thanks. If the manufactured goods were received back for repairs, and, if the repairs does not amount to manufacture, then will it be possible to send the repaired goods to party without invoice? I want to know the paper work (challan /letter) for returning the goods to party as it will not be able to make any invoice as no amt is receivable. |
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in case of capital goods sent for reprir, the sender has to issue challans in name of job worker, with caption " for repair and to be returned - not for sale" and will send the goods to job worker.
Notional value has to be declarared on challan for insurance and other re-concilation purpose.
On return of goods , the job worker will send a copy of said challan with his own challan of job work, and also mention "job work- not for sale", will mention the old challan reference on his own challan.
in case of interstate, there may be requirement of "waybills"
Preferred to attach a copy of original invoice of the goods to be sent alongwith the consgiment, to verify the value and descripttion of goods on transit.
soni chauhan
(Service)
(670 Points)
Replied 06 June 2011
16. Credit of duty on goods brought to the factory. -
(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, 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, 2002 and utilise this credit according to the said rules.
(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.
Explanation: The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by a manufacturer who removes the goods.
(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.
Retrospective Amendment by Section 39 of Taxation Laws (Amendment) Act, 2006 (29 of 2006)
Amendment of rule 16 of the Central Excise Rules, 2002.
39. (1) IN the Central Excise Rules, 2002, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise At, rule 16 thereof as published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue), No. G.S.R. 143(E), dated the 1st March, 2002 shall stand amended and shall be deemed to have been amended retrospectively in the manner is specified in column (2) of the Schedule for the period specified in column (3) of that Schedule against the rule specified in column (1) of that Schedule.
(2) Notwithstanding anything contained in any judgment, decreed or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 29th day of May, 2003 and ending with the 8th day of July, 2004 under the rule as amended by sub-section (1), shall be deemed to be and always to have been, for all the purpose, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times.
(3) For the purpose of sub-section (1), the Central Government shall have and shall be deemed to have the power to make rules with retrospective effect as If the Central Government had the power to make rules under section 37 of the Central Excise Act, retrospectively, at all material times.
Explanation. - For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence, which would not have been so punishable if this section had not come into force.
THE SCHEDULE
(See section 39)
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Provisions of the Central Excise Rules, 2002 to be amended |
Amendment |
Period of effect of amended |
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1 |
2 |
3 |
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Rule 16 of the Central Excise Rules, 2002 as published vide notification No. G.S.R 143(E), dated the March 1, 2002 |
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29th day of May, 2003 to 8th day of July, 2004 (both days inclusive) |
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'Provided that for the purposes of this rule, "assessee" shall include wire drawing unit, which has cleared the goods on payment of an amount equal to the duty at the rate applicable to drawn wire on the date of removal and on the value determined under relevant provisions of the Act and the rule made thereunder : |
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Provided further that the amount paid under the first shall be allowed as CENVAT credit as if it was duty paid by the assessee who removes the goods.' |
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PRAKASH C B
(STUDENT)
(89 Points)
Replied 06 June 2011
Please Note: Any materials received for repair or replacement. Under Rule 16 of Central Excise Rules 2002, following points to consider
1. Wether it is amounting to manufacure or not. If it is amounitng to manufacture we are suppose to pay the duty and clear the items.
2. Any material used for repair, Please charges VAT /CST.
3. Any Labour service provided please charge service Tax
Any goods should not be removed without invoice even after repair.
It is a matter of Excise, VAT/CST and Service Tax,
HS Negi
(Senior Executive- F&A)
(590 Points)
Replied 07 June 2011
I have a querry. Suppose one is the manufacturer of his standard product. Which he sell in the market through the network of his authorised dealers all over te the country.
If a dealer place an order to manufacturer of one item. Accordingly he send the goods on invoice through approved transporter. In midway, deler confirm that order has been rejected by the customer so he is not a condition to buy that material. Now manufacuer of that material calls his material from the transporter .
What will be the procedure to take back the material ? Material is in Ok condition. Excise liability of that covering invoice has been paid.
Regards
Amit
(Accountant)
(261 Points)
Replied 07 June 2011
Ask transporter to return ur goods. Make a reverse entry for the goods on the date of return in account books and in excise records
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 07 June 2011
| Originally posted by : HS Negi | ||
|
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I have a querry. Suppose one is the manufacturer of his standard product. Which he sell in the market through the network of his authorised dealers all over te the country. If a dealer place an order to manufacturer of one item. Accordingly he send the goods on invoice through approved transporter. In midway, deler confirm that order has been rejected by the customer so he is not a condition to buy that material. Now manufacuer of that material calls his material from the transporter . What will be the procedure to take back the material ? Material is in Ok condition. Excise liability of that covering invoice has been paid. Regards |
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in any such circumstances where goods cleared has to be returned to parent factory, the parent factory has to make reverse entry \, but the assessee has to intimate the range superintendent the facts and details in writing and actinon taken within 24 hours of such receipt, if R/O feels then he may depute his inspection for physical check of returneed goods and to confirm the facts. R/O may ask for more clarification / documents to his satisfaction to admit the reverse of transaction for safeguard of revenue.
Counter documents relating to placement of order, order rejection and advise to transporter with confirmation from transporter that the goods originally sent are returned herewith has to be kept in records for departmental audit, failing which such acts would not be considered by audit and the assessee may get liable to pay double duty.
Dilip Patel
(Director)
(71 Points)
Replied 08 June 2011
If the material is rejected due to inferior quality and also the party(purchaser) had rejected the order, than under which excise rule we can take the modvat and how? Please reply for this ....
Thanks
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 08 June 2011
| Originally posted by : Dilip Patel | ||
|
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If the material is rejected due to inferior quality and also the party(purchaser) had rejected the order, than under which excise rule we can take the modvat and how? Please reply for this .... Thanks |
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purchaser will issue invoice to send the materials back, reversing the duty taken input credit, and stating the original invoice reference on that invoice,
Now the manufacturer will take input credit on the strength of the invoice issued by party,
within 24 hours of receipt of such goods back, he has to send intimation to R/O for such transaction, and R/O may initiate inspection for physical presence of returned goods in factory of manufacture and allow the credit with permission to "rectification / re-manufacture"
R P Ananthakumar
(Sr. Officer - Central Excise/Cash)
(514 Points)
Replied 10 June 2011
I AGREED WITH MR.U.S.SHARMA.
The material recevied with proper excise invoice with duty payable, then you have to take that credit and entered in Form 5 register. for this case you must resend the material to the customer with payment of duty which is taken at the time of inward.
otherwise you can follow jobwork procedure. You have to received the material with proper job order 57f(4) challan and you must resend the material to the customer after rework/repair with challan.
VIRENDER KUMAR
(ACCOUNTS OFFICER)
(24 Points)
Replied 13 June 2011
Mr. Sharma is Right , you have to intimate the department in 24 hour about goods return
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