'Duty-paid goods can be brought to factory; cenvat credit allowed'

Remission of duty allowed when goods are claimed by manufacturer as unfit for consumption or for marketing

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We want to set up a STPI unit by sharing common office space on the same floor taken on lease by another STPI unit. Does it require any permission by the other entity from STPI? Does it require sub-letting or will an NOC from the landlord do? Should there be any demarcation of area for both units and also separate entry and exit points?

As per Para 6.01 (h) of the Handbook of Procedures, Vol. 1, “EOUs shall have separate earmarked premises for separate Letter of Permission. Similarly, EOUs may be approved on leased premises provided lease has been obtained from Government Department/Undertaking/Agency. However, in case lease is obtained from private parties, it shall have a validity period of five years from date of Legal Undertaking and Development Commissioner shall satisfy himself of genuine nature of lease.” Therefore, you must have separate earmarked premises with independent entry and exit, as well as a separate lease agreement with the landlord.

We have cleared some medicines on payment of duty to a Chennai party. After six months the description of the medicine in the licence is found incorrect and the same party has rejected the goods, which are not fit for reprocessing or repacking. We cannot sell them but have to destroy them. In the above situation can we take Cenvat Credit of the duty paid? Can we get remission of duty on destruction of the goods? Also, when we destroy the goods, do we have to reverse Credit of the duty paid on inputs?

Rule 16 of the Central Excise Rules, 2002 allows you to bring back the duty paid goods to your factory and take Credit of the duty paid, as though such goods are received as inputs. Rule 20 of the said Rules allows the proper officer to grant remission of duty when goods are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal. If remission is granted, the Credit taken on the inputs and input services in or in relation to the manufacture of the goods must be reversed, in accordance with Rule 3 (5C) of Cenvat Credit Rules, 2004. 

I want to buy a residential apartment in a non-processing area of a SEZ. The developer says that we have to pay service tax on maintenance charges, etc. Is this correct?

Yes. Services provided by a SEZ developer to DTA entities for consumption in non-processing area are not exempt from service tax. 

In our shipping bill, by mistake we have mentioned wrong ITC (HS) Code. How can we rectify this so that our claim under Merchandise Exports from India Schemes (MEIS) is not denied?

Section 149 of the Customs Act, 1962 allows amendment of the shipping bill on the basis of any document that existed at the time of exports. So, if you have the ARE-1 duly endorsed by the Customs, showing the correct ITC (HS) Code, you may seek amendment on that basis.