Return of Watage by Job Worker to Principal Manufacturer

[Guest]

ours is packaging unit and also undertakes job work-converting paper & board in to Packaging Cartons.

Facts -Proncipal Manufacturere supllies Paper Board to Be converted in Cartons -Finished Products

          In Invoice of job work charges weight of Inputs contained in finished product and Wastage of Input is reported.So total quantity control in the invoices and also in  sub Chalans and finally in Main Job Work chalan is mentioned.

Input wastage is not physically returned to principal manufacturer but we  -job worker -remove along with our wastage on payment of Duty.But the principal manufacturer has apprhension that excis authorities would raise on demand on them.

What is correct procedure?

[YAGAY andSUN]

According to recent judgments there is no requirement of returning the waste material to principal manufacturer provided such wastage should be removed on payment of duty.  No objections can be raised by the Central Excise Department in this regard but you would have to produce the documentory proof that such waste material was removed on payment of C.E. Duty by the jobworker.  Further, it is nowhere mentioned that waste material should be returned to principal manufacturer.

[Mahir S]

Yes, I agree with the views expressed above.

I also agree with the apprehension that the principal manufacturer have about duty on the wastage materail paid by you. It would therefore be advisable to pay separate duty each month through separate TR-6 challan, for the wastages of the principal manufacuturer. Also, a copy of the challan alongwith a work sheet showing details for the duty paid on such wastages should be sent to the principal manufacturer every month, for their own records.

However, It is not cleared, if the duty aspect is included in the job work charges or charged separately by you..

AI Summary

Waste removal on payment of duty: job worker need not return wastage if duty paid and documentary proof maintained. Job workers need not return wastage to the principal manufacturer provided the wastage is removed on payment of excise duty and documentary proof of payment is maintained. It is advisable to pay duty for such wastage separately each month via a TR-6 challan and send copies with a detailed worksheet to the principal manufacturer. Parties should clarify whether duty on wastage is included in job-work charges or charged separately.