REGARDING REBATE CLAIM.

[SANJEEV JADHAV]

WE ARE MANUFACTURER OF CASTINGS. WE HAVE PREPARED ARE-1 UNDER 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 and SUN]

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 denial for non exported production tools; duty on pattern may be recovered through CENVAT credit instead.
Rebate under ARE 1 is not available for pattern development charges when the pattern is not exported with the goods, because such patterns are used in production and not dispatched; rebate will be issued only for duty on actual exported goods, while the duty portion attributable to the non exported pattern can be recovered or adjusted through CENVAT Credit or a separate departmental order.