Whether Adjustment of Central Excise Duty paid @1% can be done if the jewellery is returned

[Anish Goyal]

A manufacturer cleared a jewellery set on 05.03.2016 on payment of Central Excise Duty @ 1%. However, on 18.03.2016, the same is returned back by the customer.

Now, can I adjust the 1% central Excise duty already paid on jewellery subsequent sales?

[KASTURI SETHI]

On what grounds the jewellery was returned ? Either Rule 16 (1) or (2) or (3) of CE Rules, 2002 is to be followed depending upon the requirement.

[Ganeshan Kalyani]

I agree with the views submitted by Sri Kasturi Sir. Rule 16 of Central Excise Rules deals with the returned goods and its excise duty implications.

AI Summary

Adjustment of excise duty depends on applicability of Rule 16 of Central Excise Rules for returned jewellery. Adjustment of excise duty on returned jewellery depends on the returns framework in the Central Excise Rules: the applicable sub rule is determined by the factual ground for return, and that sub rule prescribes whether duty may be refunded, credited, or otherwise adjusted subject to its documentary and procedural prerequisites.