Goods returned by consignee - ARE3.

[ASHOK AMIN]

Dear Sir,

We had despatched 2000 kgs of chemicals to one party at chennai in the month of April 2015 under A.R.E.3 procedure. Now, the party had sent the full quantity of materials back since it is not working for them. They had returned the materals under A.R.E.3 (Annexure 25). Kindly let us know what further procedure we have to follow at our end. Can we send the same materials to some other consignees on payment of duty ? Dear experts, please give us a complete detailed replies as soon as possible since we are facing this sort of problem for the first time.

Regards.

[Rajagopalan Ranganathan]

Sir,

The returned chemicals can be added to your finished product stock and then the same can be cleared to any other domestic party on payment of duty provided the returned chemical is in marketable condition since more then an year has expired from date of first despatch.

[ASHOK AMIN]

Thank you Sir. Secondly, I would like to know what should be the procedure from our end towards return goods from the consignee under ARE3. What steps should we take towards our range excise office and the consignor. I would like to have a detailed clarity.

Regards

[KASTURI SETHI]

Sh.Amin Ji,

You are to account for the said returned goods and clear in a normal way after payment of duty as advised by Sh.Ranganathan Sir. I fully endorse his reply.

[MUKUND THAKKAR]

Dear Amin,

if goods returned under ARE-3 treated as deem export return. you have to intimate your division office for cancellation of ARE-3. other wise it is stand non submission of rewarehousing certificate. rest of procedure is explain by Rajagopalan Ranganathanji & Kasturi sethiji follow the same.

[ASHOK AMIN]

Thanks for your good advise. But, I am still not clear with Mr Mukund Thakker sir's reply. Can you please elaborate it.

[KASTURI SETHI]

Sh.Amin Ji,

Pl. note the word, "If" in the reply of Sh.Mukund Thakkar, Sir. Had the goods originally been cleared to EOU under Rule- 19, the same would have been treated as deemed exports. Sh.Thakkar, Sir is right in this context.He has cautioned you. If 'Deemed Export' is involved, then intimation to the jurisdictional Range Officer is must. But in your case Annexure-25 (ARE-3) pertains to Rule 20 and not Rule 19. Now you are to ensure whether the returned goods were meant for EOU or for Merchant Exporter.

If still not clear, post an other query.

 

[ASHOK AMIN]

Dear Sir,

The consignee is 100% EOU. They had executed B-17 bond and they had issued a CT-3 certificate to us. We had cleared the goods under ARE3 alongwith excise invoice (without payment of duty). Now, they had returned our goods under ARE3 (Annexure - 25) with three copies. Do we still need to inform our range office. I request the experts to give a complete procedure in this regards.

[KASTURI SETHI]

Sh.Amin Ji,

It is deemed export. Inform the jurisdictional Range Officer about the returned goods by way of simple letter and give all the particulars. It is safe for an assessee. Rest procedure remains the same as already advised above.

[ASHOK AMIN]

Thank you sir for your prompt reply. Helped me very much.

AI Summary

Deemed export return: notify range officer and regularise ARE, then account for and clear goods on payment of duty. Returned goods to a manufacturer from an EOU consignee under ARE procedure are treated as deemed export returns; the manufacturer must account for the goods, notify the jurisdictional Range Officer and arrange cancellation/regularisation of the ARE, then clear the goods domestically after payment of duty if the goods are marketable, following normal excise invoicing and clearance procedures.