Removal of finished goods from fgs for rework

Sir,

In this condition duty liability to be created only Removal of Goods, if you want to rework and further sale. In this connection materials send for job work challan under Central Excise N/F 214/86 and under Cenvat credit rule 4(5)(a) after rework sale the same goods and paid the duty.

In our case the FG is within the same manufacturing location where it was orginally manufactured. Only difference is it is now in FG store under one part code. Can it be treated as job work if rework is done within the same plant?

During modification with about 10% fittings changed it will convert into a different product identified a different part number meant for a different customer. So it will have to be removed from FG as say part no. A & once modified will become part no. B. So it will have to re-enter FG Store under a different part no. So stock of part no. 1 will reduce permanently when it is removed & after rework stock of a different part no. will increase in the FG store. So how to make these 2 entries in the goods registers? If this is possible within the framework of excise provisions do we have to take any permission from the excise deptt.?

Thanks

Follow the notfn 67/95 , make bill with zero value as captive consumption , and deduct  the same qty from RG-1 , after doing  requisite process/work on it  and make fesh production entry in RG-1 and sale  by giving appropiate duty.

Mr. Mukherjee, Thanks for your help!

However the Exemption Notification No. 67/95 deals with captive consumption, in case there is any inter mediatory product comes during the course of manufacturing of final product and the same is required to be used as input in the manufacture of final product that can be cleared without payment of duty. But in the present matter this is our final product. Can it be eligible for exemption under this notification? Will there be no objection from excise dept. when they audit the transactions?

If you would like to re-work with adding 10% components, will it be called final product name is same with the present final product name?. If the final product name is differed after re-work, you can consider it as intermidate product and do it under captive consumption facility.  In such situations, you can explain regarding the product change of structure to the AC or DC over your jurisidiction to take as intermediate product since the product is already shown in FG account. If the product is called same name even after re-work, you are not allowed to take back for production.  In the worst case, I advise you to sale the material to present customer as you mentioned and ask them to send back as rejected goods after receiving at their end showing some quality defect and then take back the material for re-work and sell it after re-work.

Regards,

JMS

Dear Sir,

Please see the rule 21 of central excise rule 2002- " Remission of duty ".

or

Please make conversion entry in RG1 from A to B then you can raise invoice for B.  There is no specific rule to rework the finished goods after accounting in RG1.  You can raise document in your own format to move the goods from FG area to Assy area.

Regards

RP Ananthakumar