Withdrawal of self procured empty chemical barrels out of SEZ project, chennai

[harish kumar k]

Our organisation took a work order to execute development works in an SEZ Project. As part of execution, we are procuring Concrete Chemicals directly from Vendor partly from their Chennai Godown and 60% from their Bangalore works upon payment of Excise Duty, VAT etc. Empty barrels are returnable to Vendor in all these transactions.The said chemical was used as Plasticizer in concrete production for execution of activities as per Work order issued by client.

Now we have to withdraw empty barrels and approached Client for permission. Customs AO insisting that we have to pay Duty on the cost of Empty barrels while taking out from SEZ premises.

Please clarify the applicability of levy of Duty on Empty Barrels as we have not availed any SEZ benefits on Raw Material.

AI Summary

Duty on empty barrels exempt if returned without consideration; prove returnable packing and no separate valuation to avoid levy.
Empty chemical barrels used as returnable packing for procured admixtures and invoiced only as chemical (with no separate value for barrels) are not dutiable on removal from an SEZ provided the exporter/contractor demonstrates the barrels are returned without consideration; documentary proof of returnable packing and absence of separate valuation is required to establish the excise exemption.