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Excise Under Rule 16

rutambh (.....) (217 Points)

13 March 2011

At the time of receiving Sales Returned under Rule 16 , is required to submit intimation to excise office? any prescribe form or annexure? any notification related this issue?

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3 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 13 March 2011

assessee has to write a plain letter to R/O stating the date and time of receipt, xerox copy of original invoice and stiulated reason for return of materials to parent factory, within 24 hrs of receipt.

if R/O deem fit he may depute an inspector to verify the same physically,

after submission of the documents assessee can take credit on the basis of documents.

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 13 March 2011

Rule 16 does not specity such requirment of intimating to the department. As per the rule return of such goods needs to be recorded in the books(IN DSA). Extract from excise manual on the above rule is given below for reference.

1. Return of duty paid goods

1.1 Rule 16 of the said Rules provides for return of any goods, on which duty has been paid at the time of removal, to the factory for being re-made, refined, re-conditioned or for any other reason. In such cases, the assessee shall state the particulars of such return in his records and shall be entitled to have CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2001 and utilise this credit according to the said rules. As per this rule the goods should return to the same factory in which they were produced.

1.2 If the goods so returned are subjected to certain process which do not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken.

1.3 In any other case [where the returned goods are subjected to process(es) amounting to manufacture] the manufacturer shall pay duty at the rate applicable on the date of removal and on the value determined under Section 4 or Section 4A of the Act, as the case may be.

1.4 In the event the assessee has any difficulty, the Commissioner is empowered to resolve the same and permit the entry of the goods into the factory and the availment of CENVAT credit thereon. For this the Commissioner, either on case to case basis by special order or to be applied to “particular type of case” by general order, impose such conditions as may be necessary for safeguarding interest of revenue.