Sub-supplier sops

SME CHATROOM/ The Foreign Trade Policy does not directly outline any benefits

licy references.  The Foreign Trade Policy does not directly outline any benefits for any sub-supplier of any goods to the main supplier of SEZ unit. In case the main supplier avails the benefits under advance licence scheme or duty free replenishment certificate (DFRC) scheme, the supplier may, instead of importing duty free inputs, source the same from a domestic manufacturer.  As per Para 8.2 (a) of the Foreign Trade Policy, supplies made to advance licence holder and DFRC holder are regarded as deemed export benefits. The deemed export benefits available against such supplies are given in Para 8.4.1 of the Foreign Trade Policy.  What is the procedure to be followed for receipt by a manufacturer of goods rejected by buyers and returned for carrying out repairs, reconditioning, refining etc?  Rule 16 of Central Excise Rules, 2002 deals with credit of duty on goods brought to the factory and says :  (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 state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.  (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.  Explanation: The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.  (3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.  Here are certain situations which may lead to seeking permission from Commissioner:  

Goods received are not eligible inputs/capital goods

Goods received on duty payment but Cenvat credit not taken

Goods received without duty paying documents

Goods after availing credit ruined during repair and resulted into waste/scrap

Quantity after repair reduced compared to the quantity received

Goods received on duty payment became exempted at the time of removal

Unsold goods received back from dept

On returned goods, if duty originally paid not known

Goods removed under CT3 procedure received back for repair

Goods received back are beyond repair

Only