Central Excise TRADE NOTICE -Clearance of goods manufactured on job-work basis from the premises of jobworker

Central Excise: TRADE NOTICE NO. 04/2015-2016
 
Subject : Clearance of goods manufactured on job-work basis from the premises of jobworker- Procedure  
 
Attention of the trade is invited to the provisions of Rule 4 (6) of the Cenvat Credit Rules, 2004 which provides that the Deputy / Assistant Commissioner having jurisdiction over the factory of manufacturer of final product who intends to send the inputs or partially processed inputs outside his factory to the Job worker, can permit them to clear the goods from the premises of the job worker, subject to conditions as may be specified by him.
 
Accordingly, in order to streamline the process of permission under Rule 4(6) of Cenvat Credit Rules, 2004 in this Commissionerate, conditions and procedure are prescribed as hereunder:
 
1. General:
1. The manufacturer of the final product (hereinafter referred to as the applicant) who intends to remove the inputs or partially processed inputs outside the factory to a job-worker for furher processing and
  1. removing the final products from the factory of said job-worker for use in or in -relation to the manufacture of final product in his factory;                                                               
OR
  1. removing the final products from the factory of said job worker without  payment of duty.
    1. under Bond for export; or
    2. to a unit in a Special Economic Zone or to a Export Oriented Under taking or Software Technology Park or supplied to United Nations or an international organization for their official use or supplied to project funded by them , on which exemption of duty is available under Notf. No. 108/1995-CE dated 28th August , 1995 as amended ; or  
    3. by a manufacturer of dutiable and exempted final products, after discharging his obligation in respect of the said  goods under Rule-6 of Cenvat Credit Rules,  2004; or
    4. remove on payment of duty for home consumption; or
    5. used in the manufacture of goods by another job worker for further use in any of the manner specified in clause (a), (b) and (c) above
shall make an application to the jurisdictional Deputy/Assistant Commissioner indicating
  1. details of inputs or partially processed inputs intended to be sent to the job worker. (ii) name and complete address of the job-worker(s) . (iii) registration number , if any , and details of the jurisdictional Range / Division/Commissionerate of the said job worker(s). (iv) input output ratio. (v) nature of manufacture/ process / operation to be done on such inputs / partially processed inputs at job worker 's premises. (vi) Description of final product (tariff heading and commercial description) intended to be cleared from the job worker's premises. (vii) rate of duty with the relevant notification, if any . (viii) percentage of wastage, if any . (ix) manner of disposal of wastage, whether the same would also be cleared from the job worker's premises or would be return to the factory. (x) Approximate quantity and value of the goods to be cleared in a financial year and Central Excise duty involved therein. (xi) Such other particulars called for by the Deputy / Assistant  Commissioner as considered necessary. Intimation shall also be filed with the jurisdictional Deputy /Assistant Commissioner of the job worker in this regard. 
  1. The application should also accompany concurrence of each job worker(s) to do work on inputs or partially processed inputs supplied by the applicant containing particulars of Central Excise registration of such job worker, if any , PAN number , address of the job worker and the particulars of Division/ Range under whose jurisdiction the factory of the job worker falls;  that the job worker shall maintain the proper account of reciept, storage and consumption of such inputs or partially processed inputs, the quantity manufactured out of such materials and the quantity of by-product or waste, if any , arising during process of such manufacture.
  1. The permission granted under the said Rule shall be valid for a financial year. The permission granted is liable for cancellation by the Deputy/ Assistant Commissioner at any time, in case of any serious  irregularity.
  1. The Divisional Officer having jurisdiction over the applicant, shall periodically review the functioning of the facility granted to the principal manufacturer, shall take immediate action in case of any irregularity.
  1. The applicant is required to indicate whether the inputs or partially processed inputs sent outside would be processed by more than one job worker. In case a job worker sends the goods to another job worker on the advice of applicant under subsidiary challans, then the name and address of the job worker from whose premises the processed goods are intended to be cleared ultimately should also be given.
  1.  Procedure for removal of inputs or partially processed inputs from the principal manufacturer (applicant) to job-worker:
The principal manufacturer (applicant) should maintain book(s) of challans in triplicate, which should bear pre-printed serial numbers or with franking machine and be self authenticated as per the proforma enclosed (Annexure)
  1. All three copies of Challan should be legibly & separately marked as Original/ Duplicate/ Triplicate or should be of different colour for identification as Original/ Duplicate/ Triplicate. All challans should bear reference number and date of permission letter of the Deputy/ Assistant Commissioner.
The original and duplicate copies of challan should accompany consignment of the inputs or partially processed inputs to the job worker’s factory where processing is to be done or operations are to be undertaken.
  1. The applicant should maintain a simple register, making date wise & consignment wise entry for goods removed to job worker & its return thereof, showing co-relation of outward/ inward movement of inputs/ partially processed inputs under the rule.
  2. The principal Manufacturer will have to receive back the said inputs or partially processed inputs or the products produced therefrom into their factory within 180 days from the date of removal of the said inputs or partially processed inputs to the job worker’s factory, else the Cenvat availed of duty equal on such inputs shall be paid by them on expiry of the said period. Non-reversal of Cenvat attributable to such inputs would entail penal action along with recovery of Cenvat under Rule 14 of Cenvat Credit rules, 2004 with interest. However, Cenvat will be available to the Principal Manufacturer, one inputs or partially proceed input or the products produced are received back by them. Apart from this the applicant would also be liable to pay duty on the value equivalent to the value of finished goods intended to be manufactured at the job worker’s premises.
  3. If inputs are sent to job worker directly without bringing them into the factory premises of the principal manufacturer, job work challan shall be issued by the principal manufacturer & handed over to the job worker for accounting & physical movement of such inputs on the same day.
III. Procedure at job – workers factory :-
The job workers on completion of the process would return back inputs /partially processed goods or the products produced by them endorsing duplicate Challan of the principal manufacturer, mentioning the quantity  and description of thr finished goods, quantity of waste obtained and nature of processing or clear the inputs / partially processed goods or the products produced as per instruction of the principal manufacturer under their invoices issued under Rule 11 of the Central Excise Rules 2002 , simultaneously endorsing  duplicate job work Challan.
  1. In case of part removal of consignment by the job worker of inputs / partially processed goods or the products produced by them, it will be accompanied by a photocopy of Challan of the duplicate challan duly endorsed with the quantity sent.
  2. The goods after being subjected to the processes should be stacked separately, clearly identifiable indicating Challan No.
  3. The job worker after completion of the process should send the duplicate copy of the Challan mentioning the batch number , serial numbers of the packages, if the said partially proceed goods or the products produced, intended for clearance for the purpose referred above at Sr. No. 1(b) . In respect of removal of the job-worked goods for Export from the Prtemises of the job worker, the manufacturer shall follow the procedure as prescribed under Rule 18and 19 of the Central Excise Rules 2002 and Notification(s) issued thereunder read with instructions contained in Chapter 7 and 8 of CBEC's Excise Manual of Supplementary Instructions.
  4. The job worker should also maintain a simple record for the reciept manufacture and clearance of goods
IV.  Manner of payment of duty, if leviable, and final clearance:
As  soon as the principal manufacturer i.e. the applicant recieves the duplicate copy of the challan in respect of goods intended for clearance directly from the job – worker premises, he should make necessary entries in the production records maintained in his factory & issue invoices under Rule 11 ibid., which ultimately be sent with the goods on clearance from job workers premises. The goods should be cleared on the same day as far as possible and in case of delay, the same should be intimated in writing to the Range officer having jurisdiction over the job worker,
  1. In addition to the above, the invoice should bear the remarks in block letters on the top of the invoice '' Removed from the premises of the job worker.
  1. The principal manufacturer may have to discharge duty liability, if any, in a manner as required under Rule-8 of Central Excise Rules, 2002.
The waste/scrap, if any, generated shall be removed on payment of duty from the job-worker's premises in the above said manner or be returned back to the applicant.