Return of goods for remaking, refining, reconditioning- - Central Excise - Trade Notice No. 151/2003

Trade Notice No. 151/2003 dated 20-8-2003 Return of goods for remaking, refining, reconditioning- Procedure under Rule 16 (1) Rule 16 (1) of the Central Excise Rules, 2002, provides for bringing returned/rejected goods of any manufacture into a factory for the purpose of being remade, refined, re- conditioned or for any other reason and allowed taking Cenvat Credit on the goods returned and the manufacturer shall state the particulars of the goods returned in his records. As the trade have expressed difficulties regarding the procedures to be followed under this rule, the following procedures are prescribed. 2. The goods should be returned within a period of one year from the date of clearance or within the guarantee period whichever is later. 3 (i) If the entire consignment of the goods are returned / rejected and the same are received with the duty paid documents of the manufacture he shall take credit of the duty paid on such goods. Before taking credit the manufacturer should ensure that the credit of duty paid under the above document has not already been taken by any other person. (ii) if a portion of the goods rejected/ returned are received from the consignor along with his invoice issued under Rule 11 of the Central Excise Rules, 2002 then also the manufacturer shall take credit on the duty paid on such goods returned. (iii) However, in both the above cases the manufacturer shall furnish an intimation to the jurisdictional Range Officer and the Assistant called as the (Divisional Officer) in the proforma prescribed in Annexure- I enclosed to this trade notice, within 24 hours of the receipt of the goods (excluding intervening holidays) and keep the same ready, separately, for their inspection, for at least 48 hours from the receipt of the intimation by the Range Officer. (iv) Whenever the goods are received without any duty paying documents, the manufacturer shall keep them separately in the factory and intimate the details about the goods in Annexure - I to the Range Officer/ Divisional Officer within 24 hours from the receipt of the same. The Range Officers will visit the factory within 48 hours from the time of intimation received and verify the genuineness about the details furnished with the goods and send a scrutinize the report to the Divisional Officer. The Divisional Officer will scrutinize the report of the Range Officer and send it to the credit of the duty paid in respect of the goods received without any duty paid documents, shall be taken by the manufacturer only after receipt of the approval of the Commissioner. Till such time, the goods shall be kept separately and shall not undergo any process. 4. The manufacturer, receiving the returned/ rejected goods, shall maintain records containing the following details (1) date and time of receipt of the goods (2) details of goods, including quantity, value and the sub- heading (3) person from whom received (4) reasons for the receipt of the goods (5) document under which the goods were received (6) time required for repair / process (7) duty involved on the returned goods (8) nature of process/ activity to be undertaken (9) actual process carried out (10) details of inputs / parts/ components etc. utilized in the process and the credit of duty taken on them (11) date and time of dispatch after processing, and (120 amount of duty paid / reversed in Cenvat credit account. 5 (i) In terms of Rule 16 (2) of Central Excise Rules, 2002 at the time of clearance of the returned goods after subjecting to any process, which does not amount to manufacturer, the manufacturer shall pay an amount equal to the cenvat credit taken at the time of receipt of the said goods. However, if any inputs/ parts/ components etc. are utilized in such process undertaken, the Cenvat credit taken on such inputs/ parts/ components etc. needs to be paid by the manufacturer. (ii) When the returned goods are subjected to a process, (repair, reconditioning etc.) which amounts to manufacturer, the assessee should clear the goods on payment of duty at the appropriate rate of duty as applicable on the date of clearance and on the value determined under sub-section (2) of section 3 or Section 4 or Section 4A of the Central Excise Act, 1944 as the case may be. In such an event, the assesse need not discharge duty liability on the items/ components manufactured within the factory or on the Cenvat availed inputs, used for such process amounting to manufacturer, as prescribed at Para 5 (i) above. 6. The returned/ rejected goods, on completion of any process, shall be cleared under an invoice issued as per Rule 11 of the Central Excise Rules, 2002. 7. The goods returned shall be cleared on completion of processing within a period of 90 days from the date of receipt. This period may be extended for another 90 days by the Divisional Officer, on request from the manufacturer stating the reason. Further extension of 90 days, if necessary shall be granted by the Commissioner based on the facts of the individual cases and on the recommendations of the Divisional Officer. 8. The assesses shall separately furnish a monthly statement of opening balance, quantity received, quantity removed closing balance and quantity found unfit for reprocessing etc. credit taken and duty paid credit reversed in respect of each type of goods received for repairs etc. along with ER-1 statement to the Jurisdictional Range Officer. 9. All the Trade Associations, Chambers of Commerce and Members of Regional Advisory Committee are requested to bring the contents of this trade notice to the attention of all their members and others concerned. 10. For any difficulties arising in respect of availing the credit facilities in respect of the returned/ rejected goods, the manufacturer may contact the jurisdictional Divisional Officer or the Commissioner for solving the problems. ANNEXURE I INTIMATION IN RESPECT OF DUTY PAID EXCISABLE GOODS BROUGHT INTO THE FACTORY PREMISES UNDER RULE 16 OF THE CENTRAL EXCISE RULES, 2002 The Superintendent of Central Excise, . Range I hereby declare that the under mentioned consignment of excisable goods has been received by me/ us at our licensed premises on . at hrs for the purpose of . Name and address of the supplier of the goods No. and date of challan under which goods are received Description and variety of goods No. of packages received with identification marks Quantity as shown in the challan Quantity received Tariff Item No. and invoice / gate pass No. under which duty was paid, if any Detail of certificate reg. duty paid value of goods from the supplier of the goods sent for reprocessing 1 2 3 4 5 6 7 8 I/We declare that the goods received are identifiable with the description given in the challans to my/ our entire satisfaction. The goods will be reprocessed and removed within six months period from the date of receipt. I/We have entered the particulars of the consignment in my / our Register / records separately maintained for the purposes. Signature of the Licensee or his Authorised Agent