Procedure to Repacking of Excisable finished Goods

[Binu Karuthedath]

Dear Sir

What is the procedure to repacking of Finished goods once manufactured by the manufacturer due to a labeling problem?That finished goods already declared in last month ER 1 . Let me know the central excise procedure

[Nash Industries I Pvt Ltd]

Raise a captive consumption invoice (removal without payment of duty for other purpose). Repack / relabel and bring it to FG, reflect the transaction in ER1.

[KASTURI SETHI]

Dear Querist,

What is product ?

[Binu Karuthedath]

Dear Sir

Product is Ayurvedic medicine 3004.90.11

[KASTURI SETHI]

Chapter/Heading 3004 is covered under Third Schedule to Central Excise Act, 1944. Re-packing is a manufacturing process under Section 2(f)(iii) of Central Excise Act,1944.

[Binu Karuthedath]

DEAR KASTURI SETHI Sir

Thanks for your valuable reply

This is the case that Manufacturer has been declared the Goods Manufactured for Export. We have found some mistakes in Label of the Products.So only the solution is repacking of the same goods with a new label.Can we revise the ER1 or let me know the excise effect for repacking

[KASTURI SETHI]

As per Rule 12 (8)(a) of CE Rules, 2002 ER.1 return can be revised by the end of calendar month in which original return is filed. So there is time limit for submitting revised return. Re-packing is a manufacturing process(exscisable). The total cost of this process must be taken into account for arriving at transaction value of the final product for proper payment of CE duty. Procedure has already been advised by Sh.Ramaswamy Sir. I am talking about correct payment of duty on final product ( including the total cost repacking).

Captive consumption is exempted because of payment of duty on final product. The value of repacking is to be taken into account for correct payment of duty.

Have you crossed the time limit for filing revised ER-1 return ?

[Nash Industries I Pvt Ltd]

Ayurvedic medicaments falling under chapter 30 are valued under MRP based valuation. As such, no other cost to be included. The ED is payable on MRP less 35% abatement.

Regards

S.Ramaswamy

[KASTURI SETHI]

Yes.I agree with Sh.S. Ramaswamy Sir. The value of repacking has to be taken case of while declaring MRP.

[KASTURI SETHI]

Dear Querist,. Though the goods may be for export, yet correct CE duty has to be calculated on ARE-1.

[YAGAY and SUN]

LM (PC) Rules, 2011 read with amended in 2015 Rules would also be applicable.

[YAGAY and SUN]

Anti-profiteering rule in GST draft Bill has potential to wreak havoc for businesses.

AI Summary

Repacking as a manufacturing process requires inclusion of repacking cost in valuation and duty on the final product.
Repacking of excisable finished goods is a manufacturing process whose cost must be taken into account for valuation and duty on the final product; a captively invoiced removal for repacking and subsequent return to finished goods, reflected in periodic returns, is the practical procedure. For products valued on MRP, such as specified medicaments, duty is computed on MRP after the applicable abatement and repacking value must be included in the declared MRP. Return revision deadlines must be observed.