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Returned goods in excise return

CA SAUBHIK SAMANTA (Partner) (40 Points)

04 May 2012

Sir/madam,

please let me know what is the procedure for showing returned goods in excise return?

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3 Replies

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 04 May 2012

For returned goods after paying appropriate duty, you can utilize the CENVAT Credit equal to duty suffered. It should supported with proper documents. You can treat returned goods as par with fresh purchase of goods. But the following notification is relevant for Chapter 61,62 and 63.

‘Government of India has issued Central Excise Notification No. 31/2011-CE dated 24.03.2011
for the benefit of manufacturers of Branded Goods falling under Chapter no. 61,62,or 63 of
Central Excise Tariff i.e. Branded Apparels etc.
According to this notification, such goods (Branded Apparels) on which appropriate duties have
been paid, can be returned or brought back to the same premises or factory for the purpose of
remaking, re-conditioning, re- packing or for subjecting any other process. And at the time of
clearance of these goods on which the said process or processes have been carried out, the
manufacturer is not required to pay central excise duty.
Following conditions have been stipulated to avail the said exemption notification:-
1. The manufacturers are not allowed to take Cenvat credit of the duty paid on such returned
goods under Central Excise Rules.
2. The manufacturer is required to intimate the jurisdictional Central Excise Authority
within 48 hrs. of the receipt of the returned goods in the factory or premises
giving details of the documents under which goods are returned and the value of
such returned goods.
3. They are further required to maintain proper account of receipt and disposal of such
goods and are required to account for in their monthly return as well.
4. The exemption is available subject to the limit of 10% of the aggregate value of clearance
for home consumption from the same factory or premises in the preceding financial year.
Therefore, if the total value of clearance for home consumption (domestic sale i.e. sale
excluding export value ) is one Crore in preceding financial year then value of such
goods on which exemption under the notification is availed, should not exceed Rs. 10
Lakhs.’

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MANOJ JAIN (ASST. ACC. MANAGER) (59 Points)
Replied 09 May 2012

Dear Sunil sir

Plz tell me that if exemption is cross the limit of 10% of the aggregate value of clearance, then wht provision will be applicable ?

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 10 May 2012

Above 10% exemption limite, normal provisions are applicable. You should take cenvat credit on returned goods, and can utilize for final payment of duty