sale in transit

[Anil Jangid]

OUR COMPANY LOCATED IN GUJARAT.WE SALE GOODS TO" B" COMPANY," B" COMPANY LOCATED IN UTHRAKHAND NOW "B" COMPANY REJECT OUR GOODS, RAISED DEBIT NOT US. NOW WE DO NOT BRING BACK THE GOODS IN OUR COMPANY HAVE OPTION TO SELL THE SAME GOODS OTHER PARTY LOCATED IN UTHRAKHAND. HOW TO DEAL IN CENTRAL EXCISE. WHEN GOODS SELL IN TRANSIT FROM B COMPANY PREMISES.

[Ganeshan Kalyani]

It is interstate sale and not sale in transit. This is my view.

[KASTURI SETHI]

I agree with Sh.Ganeshan Kalyani Ji.

[Anil Jangid]

Dear sir,

How deal with central excise documentation,please guide.

[KASTURI SETHI]

Dear Sh.ANIL JANGID JI,

I have understood your problem. In such a situation procedure is laid down in Board's Circular No.207/41/96-CX dated 1.5.96, 96/7/95-CX dated 13.2.95 and 113/24/95-CX dated 4.4.95. These circulars have not been rescinded and these are still in force. For your convenience, these circulars are appended below:

Modvat on transit sales - Endorsement of invoices when goods diverted due to non-acceptance of original consignee

Circular No. 207/41/96-CX, dated 1-5-1996[From F. No. 267/102/96-CX.8(Pt.I)

Subject : Clarification on point No. 85 of 35th Meeting of the Customs and Central Advisory Council Meeting held on 4th November, 1995.

Circular No. 96/7/95-CX, dated 13-2-1995 (Relevant Extract)

Modvat - Manufacturer’s invoice to be endorsed by the Range Superintendent showing new destination

Circular No. 113/24/95-CX, dated 4-4-1995 [From F. No. 267/9/95-CX.8 (Pt.II)]

Subject :   Instructions relating to issuance of Invoice (s) under Rule 57G of Central Excise Rules - Regarding

If any problem still exists or you want any information pl. let me know through this forum of TMI.

 

 

 

[Anil Jangid]

Dear Kasturi sir,

Thanks for relevant circullars.Still I am not clear, please explain summarized procedure.I have received only debit not from B company for goods reject,,goods lying with B company premises, now we want sell c company from b premises.original/duplicate copy of excise invoice still under custody of B.

[Ganeshan Kalyani]

With due respect to Kasturi Sir reply I would seek clarification that if goods are rejected to be accepted by consignee at first place then the said procedures is applicable but if it is delivered at consignee place and later it has got rejected then would the same procedure would required to be followed. Please clarify.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Sir, The circulars mentioned by me pertain to old rules as the assessee does not want to bring the goods back into his factory premises. At present there is no such provision, only Board's circulars based on old rules can help the assessee in such a situation (as these circulars not being rescinded and the present rules do not cover such situation.) In hypothetical situation explained by you, in case the consignee rejects the goods later on for whatever the reason may be for re-making, reconditioning, refining etc. or for any other purpose, then the rejected goods have to be brought back into factory premises and procedure under Rule 16 (1) (2) (3) of CE Rules will have to be followed. If 'for any other purpose' i.e. not covered under 16(1) & (2), then Rule 16(3) will be followed. There is no problem in bringing the goods back into the factory. Here the assessee wants to sell the same goods to an other buyer (may call 'C' ) without bringing into the factory.

 

[Ganeshan Kalyani]

Thanks Kasturi Sir.

[KASTURI SETHI]

Sh.Anil Jangid Ji,

Kindly go through procedure laid down in Para No. 2 of Board's circular no.207/11/96-CX, dated 1-5-1996. It is very simple and clear. You may follow this. Other circulars mentioned by me are just for additional information.Though this circular is based on erstwhile rules of Central Excise, yet it has not been rescinded. Since present rules are silent on this issue, there should be no obstacle in following this circular.

If still not clear, let me know what problem you face.

[KASTURI SETHI]

I hope the Range Supdt. in-charge of B's factory would allow you.

[KASTURI SETHI]

LATEST CIRCULAR REGARDING TRANSIT SALE

Transit sale through dealer - Availment of Cenvat credit - Clarification

Circular No. 1003/10/2015-CX, dated 5-5-2015F.No. 267/29/2015-CX-8

Government of India,Ministry of Finance (Department of Revenue)

Central Board of Excise & Customs, New Delhi

Subject : Clarification regarding Cenvat credit in transit sale through dealer - Regarding.

AI Summary

Transit sale procedures allow diversion and resale without return subject to invoice endorsement and circular guidance.
Diversion and resale of goods at consignee premises upon rejection is permissible as an interstate transit sale if procedures in Board Circular No. 207/41/96 and related circulars are followed; the manufacturer's invoice must be endorsed to show the new destination. If goods were delivered and later rejected, they should be brought back to factory and dealt with under Rule 16(1)/(2)/(3). For transit sales through dealers and Cenvat credit implications, Circular No. 1003/10/2015-CX provides relevant clarification.