B39 Res Now 2) 201g VS A ‘SING AGH BHARAT SARKAR ‘Tor HATE MINISTRY OF RAILWAYS. ad atS RAILWAY BOARD FSIS No, 2000/RS(G)/3792 New Delhi, dated The General Manager, All Indian Railways/PUs, NF(C), CORE The DG/RDSO/Lucknow & NAIR/Vadodara CAOs, DMW/Patiala, WPO/Patna, COFMOWINDLS, RCF/RBLINDLS ‘Sub: Handling of rejection of pre-inspected item and warranty rejections Ref: «Rly. Board's letter No. 2000/RS(GV79/2-dt. 13,3.2009 ‘ During an investigation of a case relating to supply of items it was observed by the Vigilance that after the pre-inspected material was rejected by the consignee, neither ‘jection advice was sent to the paying authority nor any joint inspection was held with the Fe-inspecting agency. Further, the warranty replacements of defective/rejected supply of @ods was accepted without pre-inspection. On this, CVC has advised fo take necessary ‘Seps to: streamline the existing procedure to deal with such situation 44 Accordingly the following is being advised to all concerned in supersession of all instructions issued on the subject. Two kinds of rejection occur in case of pre-inspected supplies made by vendors. ‘A. Pre-inepected material rejected by consignee at the time of receipt B. Material rejected in warranty. ‘The methodology of handling these rejections are dealt with below. A. Pre-inspected material rejected by consignee at the time of receipt — @ In case of rejection of pre-inspected goods at consignee end, the material rejection advice/rejection memo should be sent by consignee to all concemed i.e. fim, purchaser, Pre-inspecting agency, paying authority as per the contract etc, without fail, (i) __ Financial recovery: In case payment has been made to the firm for the material, the concermed paying authority as per contract should note the rejection advice details in its recovery register for effecting recovery of payments made, as the case may be. (ii) _If the firm desires to have joint inspection, joint inspection of rejected material will held with pre-inspecting agency and the firm. In case of failure of either of the two parties to associate with joint inspection, the joint inspection should be held by the consignee with Serodbateel Avwhichever of the two parties comes for joint inspection. irrespective of whether the party(ies) attend joint inspection or not, the modality of joint inspection etc will have to be completed within 21 days of communication of rejection advice to the supplier (in fine with IRS Conditions of Contract clause 703). For imported material, the time limit will be 45 days. (iv) _ Firm may be permitted to collect the rejected goods only after the firm has deposited the payments already made by Railway (if any) to the firm or equivalent amount has been recovered for this purpose. (¥) Incase of replacement supply against the rejected goods, the same should be pre- inspected by same pre-inspecting agency who passed the material earlier. In line with IRS Conditions of Contract clause 703, no inspection charge will be paid by Railway to the inspection agency for the replacement supply. (vi) However, in case of component level rejection in an pre-inspected item (which is an assembly) the replacement supply of that component can be accepted based on firm's internal inspection certificate/guarantee certificate and tinal inspection by consignee. B. Material rejected in- warranty — |. Material are rejected in warranty in the following situations : (a) the material rejected was issued to the user (shop/shed etc) from its associate stores depot. (b). The material rejected was received by the user from a PU. or from a stores-depot which is not the associate stores depot of the user. Cat B.l(a) ; For Warranty failure in shop /shed of material issued from its associate stores depot : All warranty claims will be lodged by the associate depot officer after getting the warranty rejected material from user under advice note of return stores with reasons of warranty rejection indicated therein. Before lodging the warranty claim the associate depot officer will satisfy himself about the correctness of PO and ensure that other details including reason(s) of warranty rejection are available with the advice note of return stores. The warranty claim will be processed following procedure indicated in sub-para Ai), (i), (i) and (iv) of para 1.18 above except for the following changes: The ‘rejection advice’ mentioned in pare 1.1Ati} wit be replaced by'the ‘warranty rejection advice’, The time which can be taken for the completion of modality of joint inspection as per para 1.1A\ii) will be 45 days (instead of 21 days) from the date of communication of rejection advice to the supplier. More time is being given for joint inspection because this is a case wherein supplies nave already been taken into the usage system of Railways. Thus, either the pre-inspection agency or the firm or the railways may like to have a more detailed understanding of the failure. Cat B.I(b) : For Warranty failure in shop/shed of material received from PU (either under sale issue note or as a purchased component of rolling stock manufactured at the PU) Gotouvatd VLor from a stores depot (under inter depot transfer/sale issue note ) which is not the associate stores depot of the end user: (i) In such cases it may not be convenient for the end user to retum the material to the stores depot (against which the original supply was made by the vendor to railway). “Thus in all such cases, the warranty rejected material will be kept in safe custody by the end user and the stores depot (which received the original supply) will be advised by the end user about the warranty rejection duly indicating the reason(s) of rejection with a confirmation that the rejected material is under end user's custody. (ii) The stores depot (which received the original supply) will raise warranty claim on the firm. Before lodging the warranty claim, the depot officer will satisfy himself about the correctness of PO and ensure that other details including reason(s) of warranty rejection are available from the end user. The warranty claim will be processed following procedure indicated in sub-para A(), (i), (il) and (iv) of para 4.18 above except for the following changes: The ‘rejection: advice’ mentioned in para 1.1()) will be replaced by the ‘warranty rejection advice’. The time which can be taken for the completion of modality of joint inspection as per para 1.1A\ii) will be 45 days (instead of 21 days) from the date of communication of rejection advice to the supplier. More time is being given for joint inspection because this is a case wherein supplies have already been taken into the usage system of Railways. Thus, either the pre-inspection agency or the firm or the raiways may like to have @ more detailed understanding of the failure, For imported material, the time limit in Cat (a) and Cat \(b) will be 90 days. Warranty quantity replacement : The warranty quantity replacement will be accounted under warranty R-note by the depot officer (which raised the warranty claim as in sub-para B.{a) above). Financial recovery (if any made) against the warranty failure will be refunded to the firma on warranty quantity replacement. mM Inspection of the replacement supply against warranty rejection: (A) For cases of replacement supply against warranty failure falling in the category Bl(a) above, the replacement supply should normally be inspected by the same inspection agency which inspected and passed original supply. Thus for B.l.(a), any ‘change in inspecting authority for the warranty replacement will necessitate a format amendment in contract. . (8) tv case of warranty rejection of item of the cateyory B.I.(b) above, it may in some cases be difficult to re-use the services of inspecting agency which passed the original supply. Similarly for some items, the end user/ consignee may not have the requisite inspection facility/expertise. Thus for warranty rejection falling in the category B.I.(b) above:- {)) The replacement supply can-be inspected by the same inspecting agency which inspected and passed the original supply. Payment of inspection charges will be bore by supplier. Savtodovitel AOR The replacement supply can-be inspected by authorised representative of consignee. OR The replacement supply can be made by firms own internal inspection certificate. i) The decision on the above will rest with the depot officer who raised the warranty claim and will be indicated in the warranty claim notice. (C) However in case the warranty failure is of a component of an assembly supplied, the component can be accepted on firm's own Guarantee Ceriificate/intemal inspection certificate and consignee’s final inspection for both the categories feat B Ka) and Cat B I(b)} of warranty failure. WV) -Place of warranty seplacement - For warranty replacement of category B..(a), in order to ensure correct accountal of warranty replacement, the place of warranty replacement will be the depot which received the original supply. For warranty replacement of failure falling in category B.1.(o) above, an exemption can be made and the place of replacement supply can be indicated by the depot officer (at his option) in the warranty claim notice to the firm to be the end-user's place; (V) For warranty replacement of the category B.1(o), due care will be taken by the end user fo ensure that accountal of replacement supply etc. are properly taken care of. After settlement of warranty claim the rejected material will be handed over by the end user to the firm's representative. The end user will also inform the depot officer who raised warranty clair about the replacement. 1.2. At the option of the depot officer/end -user, rectification of the material rejected {under category 1.1(A) and 1.1(B)} may be permitted within railway premises by the firm only after the firm has refunded the payment (if already made by Railway) or equivalent amount has been withheld for this purpose. However, from the date of communication of rejection advice, the rectification activity has to be completed within 21/45 days for indigenous/imported material respectively for rejection of the category 1.1(A) and 45/90 days for indigenous/imported material respectively for the rejection of the category 1.1(B). If more time is taken beyond this, applicable ground rent will be levied on the firm. 2. In order that quantity shortfall due to warranty failure of Cat. B.1.(a) is made up, the depot officer may prepare an additional demand (equal to the quantity failed in warranty) for procurement, once recovery towards warranty has been confirmed by Accounts. Any warranty replacement subsequently made will automatically get reflected in stock and thus, there will not be any net extra procurement. It will however ensure timely availabilty of materials. 3..The policy as indicated in para 1.1 to 1.2 above will be incorporated in bid condition by the ZRIPU etc. and referred to in the contract as a part of special conditions of contract, Further to ensure data integrity the system of integrated MMIS will be used to capture the processes as brought out above. Gavherde ts)This is issued with the concurrence of Finance Directorate of Ministry of Railways. Camron with {Santosh Mittal) Dy. Dir. Railway Stores (G)-1 Railway Board No. 2000/RS(G)/379/2 New Delhi, dated: ].B.2015 41. FA&CAOs, All Indian Railways & Production Units 2. PCEs, All Indian Railways & PUs, WPO/Patna, RCF/RBL, COFMOW, DMW 3. The ADAI(Railways), New Delhi (with 10 spares copies) 4. The Director of Audit, All Indian Railways. ja for Financial Commissioner / Railways No, 2000/RS(G)/379/2 New Delhi, dated: “7 9.2015 1, COSs, CMEs, CEEs, CSTEs, All Indian Railways & PUs, RCF/RBLINDLS, COFMOW, CORE, WPO and RWPIBela 2. The Directors— a) Indian Railway Institute of Sig. Engg. & Telecom, Secunderabad b) Indian Railway institute of Mech, & Elec. Engg., Jamalpur c) Indian Railway institute of Elect. Engg., Nasik d) Sr. Prof. (Material Management), NAIR, Vadodara e) Indian Raiiway Institute of Civil Engg., Pune 4). Ingian Railway Institute of Traffic Management, Lucknow 3. Director, iron & Steel, 3, Koila Ghat Street, Kolkata 4. Executive Director (Stores), RDSO, Lucknow 5. Chief Commissioner, Railway Safety, Lucknow 6. Zonal Railway Training Institute, Sukadia Circle, Udaipur Saatehd Matted, (Santosh Mittal) Dy. Dir. Rly. Stores(G)-1 Railway Board No. 2000/RS(G)/379/2 New Delhi, dated: “7 $2015 Copy to 1. The Genl. Secy., AIRF, Room No, 248, & NFIR Room No. 256-C, Rail Bhavan 2, The Secy. Genl., IRPOF, Room No. 268, FROA, Room No. 256-D & AIRPFA, Room No. 256-D Rail Bhavan Serstow Metal (Santosh Mittal) . Rly. Stores(G)-1 Railway Board Copy to:- Sr. PPSs / PPS / PS to 1. MR, MOS(R) 2. CRB, FC, ME, ML, MM, MS, MT, SECY., DG (RHS), DG (RPF) 3. 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