clearance made to SEZ on payment of duty under ARE-1

[jagadesh kumar bhojanapalli Kumar]

Dear Sir,

Our company has been registered under central Excise . We have made clearances to SEZ unit during September 2015 under ARE-1 on payment of Excise duty @ 12.5% . They found material supplied by DTA unit is to be repaired/reconditioned.

A)What is the procedure to be adopted under what authority ? (We are having repairing/recondition in facility in our factory premises itself).

B) What will be the procedure in case if we are selling to another SEZ unit or EOU unit after repair or reconditioned ?

C) Shall we take Cenvat credit/stock in our books of records against sales returns is based on our central excise invoice or Not

regards

jagadesh kumar

[Rajagopalan Ranganathan]

Sir,

When the goods procured by a SEZ unit from the DTA are sent back to DTA as it is or without substantial processing , such goods shall be treated as re-imported goods (as the original supply be treated as export). Their entry into the DTA would be treated as re-import and normal re-import conditions and procedures would apply such as the filing of Bill of Entry. However, when Customs import duty is 'Nil' and while procurement of the goods no export benefits were availed, then in such cases the goods may be removed on the basis of invoice only and filing of Bill of Entry is not required.

Since the returned goods are treated as re-imported goods and if you have paid CVD and SAD on such returned goods you can avail the credit of the same under Cenvat Credit Rules, 2004. After repairing /reconditioning og the returned goods you can remove the same to any other SEZ unit/EOU etc as if you are removing new manufactured goods following the usual procedure.

AI Summary

Re-import treatment of returned SEZ goods may require bill of entry; duty-paid CVD/SAD credit allowed on repair and resale. Returned goods from SEZ to DTA without substantial processing are treated as re-imports and normally require filing a Bill of Entry; if import duty is nil and no export benefits were availed, removal may be on invoice without Bill of Entry. CVD and SAD paid on returned goods can be claimed as Cenvat credit under the Cenvat Credit Rules, 2004. After repair or reconditioning in DTA, the goods may be removed to other SEZ units or EOUs following the usual procedures applicable to newly manufactured goods.