18 September 2010
Rule 57F(4) – removal of inputs as such or partially processed inputs in respect of which Modvat credit has been availed.
The removal of inputs or partially processed inputs is governed by the provisions of Rule 57F(4) of the Central Excise Rules, 1944. The inputs and partially processed inputs can be removed for the purposes of test, repair, refining, reconditioning or carrying out any other operation necessary for the manufacture of final products or for manufacture of intermediate products necessary for the manufacture of final products. The inputs or the partially processed inputs after they are subjected to the requisite process are to be brought back to the factory within 180 days and are either to be used in the manufacture of final product or removed after payment of duty for home consumption or for export under bond. The inputs or partially processed inputs after they have been subjected to the requisite process and brought back to the factory, can be removed without payment of duty to a unit in Free Trade Zone or to a 100% EOU or to a unit in Electronic Hardware Technology Park or Soft ware Technology Parks or supplied to the United Nations or an International Organisation for their official use or supply to projects funded by them, on which exemption of duty is available under notification no. 108/95-CE dated 28.8.95
The waste generated during the process performed outside the factory, is required to be returned to the factory. However, the requirement can be dispensed with, if the excise duty leviable on such waste, is paid.
The removal of inputs or partially processed inputs under Rule 57F(4) is undertaken after debiting an amount equal to 10% of the value of such inputs or the partially processed inputs. The amount can be debited either in the RG-23A Pt.-II account or in the current account. The manufacturer can take credit of the amount thus debited when the entire quantity inputs or partially processed inputs minus the waste generated if any, is received back in the factory, in the RG-23A Pt.-II account.
If the inputs or partially processed inputs are not received back in the factory of manufacture of final products within a period of 180 days, the manufacturer is to recalculate the amount of credit attributable to such inputs or on inputs contained in the partially processed inputs. The adjustment of differential amount if any, after taking into account of the amount already debited while sending the inputs or partially processed inputs from the factory, is thereafter made.
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