Excise -free issue material usage certificate from excise dp

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 February 2015 FREE ISSUE MATERIAL USAGE CERTIFICATE.

Dear Experts,
Thanks for your support on various issues. Now the query is.

1. We got the order from our customer M/s. A to supply the material to mega power project 6 x 660 MW and they have provide us PAC (Project authority certificate) for supply of some assembly with nil rate of duty.

2. In the said assembly it required huge bearing to rotate the products.

3. For the above assembly required bearing are imported by our customer M/s. A on advance authorization license scheme with nil rate of duty for above project.

4. They have issued the same bearing for use in above assembly as free issue material.

5. We have used that bearing in assembly and sent the item directly to mega power project. And mentioned the free issue material value in our invoices for calculation of assessable value.

Now our customer is asking “Free issue material usage certificate” from our range superintendent that the bearings is used in the above assembly to close the advance authorization license. But our range superintendent is telling that the certificate is not required the product is going to mega power unit and they will provide you this certificate.

But our customer is telling that, the bearings was used in assembly at your premises hence you have to provide the certificate from your range superintend.

So kindly help us , the certificate is required from our excise department to close the advance license of our customer M/s. A, if yes give notification of customs/excise , so that I can show to excise department. If No, kindly give us any reference enable us to show to our customer M/s. A.

Reply is most urgent and thanks in advance.

Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2015 sir, No expert in our club regarding above query, No answer more than 10 days, I think this issue was not solved our experts earlier may be.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2024 In the context of the Free Issue Material Usage Certificate for excise purposes, here’s a clarification based on the scenario you've described:

1. **Usage of Free Issue Material:**
- Your customer M/s. A has provided you with bearings under an advance authorization license scheme with nil rate of duty for use in a specific assembly meant for the mega power project.
- These bearings are considered free issue materials since they were supplied by the customer for incorporation into the assembly.

2. **Requirement for Free Issue Material Usage Certificate:**
- Your customer is requesting a Free Issue Material Usage Certificate from your range superintendent to close the advance authorization license.
- However, as per your range superintendent, they are of the view that such a certificate is not required because the final assembly (incorporating the bearings) is directly going to the mega power project, and they expect the project authority to handle any necessary certification.

3. **Position and Notification:**
- Typically, under customs and excise regulations, the responsibility for documenting the usage of free issue materials lies with the recipient of the materials, which in this case is your organization.
- However, the exact requirement for a Free Issue Material Usage Certificate can vary based on the terms of the advance authorization license and specific customs notifications.

4. **Reference and Clarification:**
- Since your range superintendent has indicated that such a certificate is not required and the product is directly going to the mega power project, you may need to communicate this clearly to your customer M/s. A.
- It would be prudent to review the specific terms of the advance authorization license scheme and any relevant customs notifications that govern the usage of free issue materials.
- Unfortunately, specific customs notifications and circulars are often subject to updates and revisions. For the most accurate guidance, consulting directly with a customs or excise consultant, or reaching out to your local excise department for clarification based on the current regulations, would be advisable.

5. **Urgency and Communication:**
- Given the urgency, it’s essential to provide clear communication to your customer M/s. A regarding the stance of your range superintendent and any applicable regulations or notifications that support this stance.
- Ensuring that your customer understands the process and regulatory requirements will help in resolving this issue promptly.

In conclusion, while a Free Issue Material Usage Certificate may not be mandatory based on the information provided by your range superintendent, it’s crucial to validate this understanding with relevant customs or excise authorities and communicate effectively with your customer to resolve any misunderstandings.

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