REGARDING REBATE CLAIM.

[SANJEEV JADHAV]

WE ARE MANUFACTURER OF CASTINGS. WE HAVE PREPARED ARE-1UNDER REBATE BY CHARGING PATTERN DEVELOPMENT CHARGES SEPERATELY AND SUBMITTED OUR REBATE CLAIM WITH ALL NECESSARY DOCUEMNTS. OUR EXCISE DEPARTMENT IS DENYING REBATE CLAIM ON PATTERN DEVELOPMENT COST. THEY INFORMED US THAT PATTERN IS NOT EXPORTED ALONG WITH CASTINGS AND HENCE THEY WILL NOT SANCTION CLAIM FOR PATTERN DEVELOPMENT COST. PLEASE INFORM CAN WE HAVE TO LOOSE DUTY PAID ON PATTERN DEVELOPMENT COST ?

[YAGAY andSUN]

Dear Sanjeev,

The Central Excise Department's opinion on the aforesaid matter is correct.  Since the goods have not been exported as such, therefore, no rebate will be available.

Such patterns are made of sand, chemicals and some sort of glues and may be used in operations from one to three times.  These are being used in production of casting, but, can't be dispacted with the final goods.

Best Regards,

Pradeep Khatri

 

[DIVYESH PANDYA]

In you case Department will not sanctioned the Rebate claim amount in respect of Pattern Development Charges but Department will issue cheque in respect of actual clearance of goods mentioned in ARE-1 & S.B. and the Duty portion of Pattern will be allowed by issuing a seperate order for availement of CENVAT Credit.

FROM

D.M.PANDYA

CONSULTANT OF

CUSTOMS - EXCISE - S. TAX- DGFT - EIA

MOB.:-098258 84909

AI Summary

Rebate Claim Denied for Pattern Development Charges Under ARE-1; Patterns Not Exported With Castings, Says Excise Dept. A manufacturer of castings submitted a rebate claim under ARE-1, including pattern development charges. The Central Excise Department denied the rebate for these charges, stating that the patterns were not exported with the castings. One respondent confirmed the department's stance, explaining that patterns, made from materials like sand and chemicals, are not dispatched with final goods and thus do not qualify for a rebate. Another respondent noted that while the rebate for pattern development charges would not be sanctioned, the department would issue a cheque for the actual clearance of goods and allow CENVAT credit for the duty on patterns.