Excise Duty payment and recredit

[JAGANATHAN KUMARAVEL]

Due to shortage of space the assessee wants to move the goods outside the factory by debiting the duty.  Can the Assessee raise invoice subsequently to the customers refereing to the duty debited initially at the time of moving the goods outside the factory.

Alternatively can the assessee take recredit of the goods if the goods are moved in  and then invoiced to the customers and pay the tax .

Please let me know the provions underwhich we can carry out the above transaction. 

Obtaining the permission from the Department for such a transaction is lenghty affair and hence the alternative proposals are made

 

[Achyut Kale]

Dear Mr. Jagganathan,

From the first para of your query it seems that, you are facing problem in storage of inputs because of in-adequet space. If this the issue, then you need not have to reverse the cenvat credit for removal of input only for the purpose of storage of the same out ouf factory premises. You may obtain necessary permission from the jurisdictional Asst./Dy. Commissioner for storage of duty paid goods (on which cenvat is availed) under Rule 8 of the Cenvat Credit Rule 2004.

After grant of such permission you may store the inputs out side factory premises by following the the conditions mentioned in the permission letter. In this transaction there is no need to reverse the credit while removal of inputs for storage.

If you are selling the inputs as such home consumption then you have to prepare invoice under rule 11 for removal of the inputs on payment of duty.

In case of any further dobut may contact on my e-mail i.d. [email protected] or contact on my cell No. 9890225544

Regards

 

Achyut Kale

 

 

[NEERAJ KUMAR, RANCHI]

Dear Mr Kumaravel

The issue raised by you is covered under Rule 8 of the Cenvat Credit Rules 2004  for which permission is required by thee jurisdictional AC/DC. I am unable to understand why this is a lengthy affair for you. Goods cant be removed from  factory just by debiting duty , it can be removed only on the basis of an invoice under Rule 11 of thhe Central Excise Rules.

Neeraj

[Snehal Kulkarni]

 

Dear Mr JAGANATHAN

The querry is not specific. Do you wish to say

1. That you wish to store the Inputs outside factory premises OR

Answer to the Query is given by our Learned Brother. You have to follow the Rule 8 of Cenvat Credit Rules 2004

2. You wish to Store the Finished Goods outside the factory premises

For this you have to apply for the permission for storage of Finished Goods outside the factory premises by quoting the Rule 4 (4) of Central Excise Rules 2002 to the Jurisdictional Commissioner.  After the written Permission from the Commissioner, you can store the Finished Goods without Payment of Duty after following the conditions specified thereon.

The Procedure is not lengthy. You may obtained the permission within a week time, if the documents are clear.

 

Thanks.

 

 

 

 

 

 

[Dilip Darji]

Dear Sir.

In case if you are referring to Foinished Goods:-

Please refer Page no.6.200 of R K Jaimn's Central Excise Lawanual 2011-12 (May 2011) 53 rd Edition, you would find a Circular No.610/1/2002-CX dt.01/01/2002 (This is also available on CBEC website), wherein it is mentioned at Para No.3 that "the facility of storage of non-duty paid goods (manufacured goods) outside the factory premises, without payment of duty, may be made available to ensure no hardship is caused to the trade."

Maximum, Dept. can ask for a simple indemnity Bond on a stamp Paper that you shall not remove the goods to anyone, except return to the main factory, from where the goodfs shall be removed on payment of excise duty". 

In view of above clarifications, other possibilities are ruled-out.

In case, if you are referring to In-puts:-

Please refer to Page No.6.238 and 6.239 of R K Jain's Central Excise Lawanual 2011-12 (May 2011) 53 rd Edition, on which a Trade Notice No.93/2004 of Ahmedabad-II Commissionarate, has been reproduced, which gives the detailed procedure to be followed by the manufacturer.

[RAM SHARMA]

Can we store finished goods and input material simentaniously. Secondly can we store finished goods out side the factory by taken Warehouse Dealer Registration. What is the best option.

Thanks

[Dilip Darji]

Mr.Sharma.

You cannot store input and finished goods simentaniously, as Finished are those on which excise duty is payable on its removal from the factory(which is known as non-dauty paid goods), whereas inputs are duty paid inputs. You cannot store non-duty paid goods and duty paid goods. It will be very difficult to prove if both are stored at the same place simentaniously,

You can very well  obtain warehouse registration outside factory and store duty paid finished goods.

If you have sufficient storage place/area in your factory, you can demarkate certain area for FG and Inputs (simply by drawing a colored lines of the floor) and continue youir activity, without spending any extra money.

Otherwise, you may go for warehouse registration ans shall have to incuur additional expenses on (1) godown rent (2) pay duty on FG while transferring to Warehouse (3) obtaining Warehouse Registration etc. 


 

 

[Ketan Jog]

Hello,

I have a follow up query.

We have obtained a permission for storage of finished goods outside factory under 4(4). We have had it for 3-4 years now, being renewed annually. The department now has sort of changed its stand, saying we cant have it for "years", it can only be given for a temporary period. The rules do not restrict "period", does anyone know of any other reference where "period" is mentioned in any departmental circular or notification or .....

AI Summary

Guidelines for Storing Goods Outside Factory: Rule 8 of Cenvat Credit Rules 2004 and Rule 4(4) of Central Excise Rules 2002. An individual inquired about the procedures for moving goods outside a factory due to space constraints, specifically regarding excise duty and invoicing. Respondents advised that under Rule 8 of the Cenvat Credit Rules 2004, permission from the jurisdictional authority is required to store goods outside the factory without reversing Cenvat credit. For finished goods, Rule 4(4) of the Central Excise Rules 2002 applies, requiring permission from the Commissioner. The discussion included references to legal manuals and circulars, emphasizing that simultaneous storage of duty-paid inputs and non-duty-paid finished goods is not allowed. The process for obtaining necessary permissions was described as not lengthy if documentation is clear.