Treatment of reimport for processing & re-export-Reg.

[RAM SHARMA]

Dear Experts,

We have exported our goods in april 2016 under rebate claim of excise duty. we have received all claims and incentives from the department. Now, due to some quality constraint we have import the same goods (re import for reprocessing and re-export) after paying all custom duty.

1) Whether we can take cenvat credit on such cvd and additional duty on such goods and can treat as a purchase ?

2) Whether we have to reverse excise duty claim and other export incentive received by the department ?

3) Whether we have to book sales return ?

Please clarify.

Thanks & Regards

[YAGAY andSUN]

Replies to your query:-

1. On rejected goods when received by you, you can CENVAT credit under the Provisions of Rules 16 of the CENVAT credit Rules, 2004.
2. You have to reverse or payback all export incentives along with interest at applicable rates on such rejection of imported goods.
3. Yes, you would have to treat it as sales return.

[Suryanarayana Sathineni]

Dear Friend,

It is not clear from your query under which Notification you have re-imported the material ?

However, if you clear under Notification 94/96-Cus on surrender of the export incentives + Rebate etc under the head CVD, then you are eligible for credit

If you have re-imported under Notification No. 158/95-Cus for re-process and re-export on execution of a Bond, you cannot avail cenvat since you have not paid any duties.

AI Summary

CENVAT credit eligibility: surrender export incentives and pay duties to claim credit; bond-based reimports deny credit. Where reimported goods for reprocessing are cleared on payment of customs duties and export incentives are surrendered, CENVAT credit may be claimed under the CENVAT Credit Rules; previously availed export incentives must be reversed with interest and the transaction treated as a sales return. If reimportation occurs under a duty-exemption bond for reprocessing and re-export, no credit arises because duties were not paid.