We are operating different unit registered under Central Excise Act. under one entity name as Anchor Mark Pvt. Ltd.
We had Supplied material to our customer one year back for trial purpose on payment of excise duty from our other unit which is closed now the same customer wants to return the material alongwith their excise invoice.
Can we take the material to our other unit which is registered under Cental Excise Act in different juridiction.
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You can't receive the material in your unit since this material was removed by your other unit and which is now closed. Further, there is no such provision underRule 16 of the Central Excise Rules,2002.
I have perceived the facts of the case as under. You were having registration at two different places. From place X, you have sent material under a cover of an invoice. Based on that, your customer would have taken credit of Excise duty.
Now your X unit has been closed down. Customer wants to return the goods under a cover of an invoice at Y unit. Can the credit of the duty be taken at Y unit.
In that regard, customer would have paid the amount as per the provision of Rule 3(5) of the Cenvat Credit Rules, 2004 which reads as: ‘ Rule 3(5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9:’
Further, Rule 3(6) of the Cenvat Credit Rules, 2004 states that the amount paid under Rule 3(5) shall be eligible as CENVAT credit as if it was a duty paid.
Thus, the goods returned by the customer shall be considered as duty paid considering the above provisions.
However, care must be taken to ensure that the duty paying document prepared by your customer at the time of returning goods should be addressed to the existing unit and goods must reach at the existing unit.
Thus, you can avail the goods in the second unit (unit Y) as well as you can also avail its credit. There is no bar in the Central Excise Act on this.
CA Rohan Thakkar
The answer of your above query is YES.
You can bring back the goods to your factory which is presently working. As these are retruned goods, return by the Customer for what so ever reason, can be bring back under rule 16 of the Central Excise Rules, 2002.
The language of Rule 16 is -
Rule 16(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall stat the particulars of such receipt in his records and shall be entitiled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilize this credit according to said ruls.
As far as I could understand of your question name of many units may be the same in your case but one thing to be notied that in central excise provisions each units must be having specific and different ECC No. even though based on same PAN no.
Now coming to your question I think both Mr Khatri and Mr Thakkar are correct. I think it is not material if the said goods were removed from other unit which is closed. As the fact stated by you is that goods being removed from your customer( which seems to be a unit registered under central excise ) on the basis of a central excise invoice. So what the customer(Now supplier) needs to do is that they should issue a cenvatabble invoice mentioing the duty amouunt therein (as per cenvat credit rules 3(5) the total credit amount involved in such item). there is no need to mention any where by you that the goods earlier was removed from you sister unit which is closed now and can easily take credit on the capacity of that invoice. For you this is not a returned goods.