Export without payment of duty

[ajay kottakota]

Whether goods received by taking credit under rule 16 can be exported without payment of duty under rule 19? Pls provide citations of case laws if any.

[Rajagopalan Ranganathan]

Sir,

Rule 16 (1) and (2) of Central Excise Rules, 2002 states that where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.

(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.

In view of the above you can export the returned goods without payment of duty under rule 19 of Central Excise Rules 2002.

[YAGAY andSUN]

Dear Ajay,

Since there is no tax on Export (except in few cases), therefore goods received under Rule 16 can be exported without payment of duty or reversing of equivalent CENVAT credit.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

AI Summary

Export without duty: goods received under Rule 16 may be exported without payment of duty or reversal of CENVAT credit. Goods received under Rule 16 are eligible for CENVAT credit when brought back into factory and, unless the process does not amount to manufacture (in which case equivalent credit must be paid), duty on later removal is payable at the applicable rate; exports under Rule 19 are generally duty-free and such Rule 16 receipts may be exported without payment of duty or reversal of equivalent CENVAT credit.