Job work in article of jewellery [Rule 12AA] :
(1) Every person (except an export-oriented unit or a unit located in special economic zone) who gets article of jewellery or other articles of precious metals falling under heading 7113 or 7114 as the case may be of the First Schedule to the Central Excise Tariff Act, 1985 produced or manufactured on his behalf, on job work basis, (hereinafter referred to as “the said person”) shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with all the relevant provisions of these rules, as if he is an assessee.
(2) If the said person desires clearance of excisable goods for home consumption or for exports from the premises of the job worker, he shall pay duty on such excisable goods and prepare an invoice, in the manner referred to in rules 8 and 11 respectively except for mentioning the date and time of removal of goods on such invoice.
(3) The original and the duplicate copy of the invoice so prepared shall be sent by him to the job worker from whose premises the excisable goods after completion of job work are intended to be cleared, before the goods are cleared from the premises of the job worker.
(4) The job worker shall fill up the particulars of date and time of removal of goods before the clearance of goods and after such clearance the job worker shall intimate to the said person, the date and time of the clearance of goods for completion of the particulars by the said person in the triplicate copy of the invoice.
(5) The said person may supply or cause to supply to a job worker, the following goods following procedure as given hereunder, namely:-
(i) inputs in respect of which he may or may not have availed CENVAT credit in terms of the CENVAT Credit Rules. 2004, without reversal of the credit thereon; or
(ii) goods manufactured in the factory of the said person without payment of duty; under a challan, consignment note or any other document (herein referred to as “document”) with such information as specified in sub-rule (2) of rule 11 of the Central Excise Rules, 2002, duly signed by him or his authorised agent.
(iii) The goods to be sent should be sent under a challan, consignment note or any other document with the following information:
i. Serial number;
ii. The registration number,
iii. Name of the consignee,
iv. Description of goods,
v. Classification of goods,
vi. Time and date of removal,
vii. Mode of transport and vehicle registration number,
viii. Rate of duty,
ix. Quantity and value of goods,
x. Duty payable thereon (with a note that not payable in terms of Rule 12AA(5).
(iv) The Job work register has to be maintained wherein the details of goods sent for job work, corresponding receipt from the job worker and in case of removal from the job worker‘s place details of such removal correlating to the goods sent .
(v) The waste and scrap generated at the job worker‘s place has to be received back and co-related. If not duty on such waste and scrap has to be discharged if the credit has been availed on the same.
(6) The responsibility in respect of accountability of the goods, referred to in sub-rule (5) shall lie on the said person.
(7) The job worker shall not be required to get himself registered or shall not be required to maintain any record evidencing the processes undertaken for the sole purposes of undertaking job work under these rules unless he has exercised his option to do the same. In case he does not exercise the option he can follow the procedure as given hereunder:
(i) The job worker has to maintain a register setting out the details as to the goods received for job work on a supplier wise basis as well as other basis like challan or order or monthly.
(ii) After processing the goods, the goods are to be returned under a cover of challan, which gives reference to the document or order no. under which the same was received so as to assist the principal to co-relating the same.
(iii) Further such register maintained should also set out the details of subsequent return of the processed goods to the principal referring to the document under which such goods were sent.
(iv) If the goods are removed directly from his premises, then the details as to the goods removed, corresponding waste, scrap generated, or returned details has to be maintained.
(8) The job worker, with or without completing the job work may, –
(i) return the goods without payment of duty to the said person; or
(ii) clear the goods for home consumption or for exports, subject to receipt of an invoice from the said person, as mentioned in sub-rule (4).
(9) The job worker shall clear the goods after filling in invoice the time and date of removal and authentication of such details. The rate of duty on such goods shall be the rate in force on date of removal of such goods from the premises of the job worker and no excisable goods shall be removed except under the invoice.
For the purpose of this rule, “job worker” means a person engaged in manufacture or processing on behalf and under the instructions of the said person from any inputs or goods supplied by the said person or by any other person authorized by the said person, so as to complete a part or whole of the process resulting ultimately in manufacture of articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985, and the term “job work” shall be construed accordingly.
(i) The job worker should agree in writing that he would get registered under central excise and comply with the provisions therein to the supplier of the precious metal and gems.
(ii) The job worker being the registered assessee should maintain the production record.
(iii) The finished items are to be sent under cover of an excise invoice issued under Rule 11.
(iv) The job worker should value the goods appropriately. The products would be ad valorem i.e., (material cost + conversion charges) (see Chapter on Valuation).
(v) The job worker has to ensure that he is availing the admissible and eligible credit so as to be competitive.
(vi) The duty payment may be made after adjusting the cenvat credit on a timely basis.
(vii) The returns in ER-1 are to be submitted by the job worker once in a month/quarter as the case may be.
(viii) The job worker would be responsible to account for the materials and if any were lost he would be liable to the same and have to pay the duty as if the same were for home consumption.
It has been clarified that if any goods or part thereof is lost, destroyed, found short at any time before the clearance of articles of jewellery falling under heading 7113 of the First Schedule to the Tariff Act or waste, by-products or like goods arising during the course of manufacture of such goods, the said person shall be liable to pay duty thereon as if such goods were cleared for home consumption.