Exempted Goods

[Pravin Deokar]

Dear Sir,

We are manufacturer of excisable as we as exempted goods, we are taking cenvat on the inputs and paying the 5% amount on the finish goods clearance. I want to know whether we have to pay the 5% amount on goods cleared for export as the the notification No.24/2010-CE (NT) dt 26.5.10 specifically exclude the exempted goods from exporting in Bond.

[YAGAY andSUN]

According to Rule 6(6)(v) of CENVAT credit Rules 2004, 5% is not to be required to be reversed on export sale.

[Mahir S]

The said notification refers to export without furnishing Bond, in case the goods are exempted from payment of duty.  Hence, as in your case, you can surely export the exempted goods directly and without furnishing any Bond to the department. Also, you need not have to pay either 5 % or any such duty amount for such exempted goods cleared for export.

However, in case of excisable goods ( which are also being manufactured by You), Bond is required to be furnished and thereafter, the same can also be exported without payment of excise duty thereon.

[Ram Niwas]

Dear sir,

As per my openion  Rule 6 (6) (v) of Cenvat Credit Rule, provides you exemption to pay 5% (Latest 6%) for those clearance made under bond but through the Notn No. 24/2010 CE NT emempted goods omitted from this rules " that export of excisable goods which are chargeable to nil rate of duty or are wholly exempted from payment of duty, other than goods cleared by a hundred per cent export-oriented undertaking, shall not be allowed under this notification;  and you should pay duty 5% or you should go through under notn 21/2004CE(NT).

AI Summary

Cenvat reversal on export: exempted goods may be exported without bond and without reversal; excisable goods require bond. Advisory responses indicate that CENVAT reversal on export sales of goods exempt from excise duty is generally not required under Rule 6(6)(v), and that Notification No.24/2010-CE(NT) contemplates export of exempted goods without furnishing a bond and without payment or reversal of duty. By contrast, excisable goods require a bond for export and one advisory cautions that Notification No.24/2010 may exclude some exempted goods, suggesting possible payment of the adjustment amount or reliance on an alternative notification.