EXCISE DUTY APPLICABLE FOR REMOVAL OF INPUTS AS SUCH TO SEZ

[Eeranna Halakatti]

We are Manufacturer of Sheet Metal Enclosures. We got order from one of our customer who is situated in Special Economic Zone. Before processing his order he has canceled the order due to some problem.

We already bought some excise inputs for processing his order, so we discussed and decided to send the inputs to customer which we bought for processing his order.

Query.

1. Can I raise the excise invoice to him?

I would request you to suggest on this.

Thanks and Regards

Eeranna Halakatti

AI Summary

Supply to SEZ: inputs may be cleared as export under ARE 1 or CENVAT credit used when removed as such.
If inputs bought for an SEZ order are removed to the SEZ after cancellation, a manufacturer who availed CENVAT credit may utilize that credit to meet the obligation when inputs are removed as such or partially processed and may issue an excise invoice passing the credit. Alternatively, supplies to SEZ are treated as exports and may be cleared under bond or as duty paid on ARE 1 with rebate claim, or cleared without passing credit when removed as such, subject to necessary documentation and SEZ procurement conditions.