taking of credit if debit note issued, Central Excise

[ramniranjan kandoi]

If  Input is recd. @ Rs.25/ per kg, duty is also paid on Rs.25/ by supplier. After receipt, if some defect is found than consignee issues Debit Note to the supplier thus pay less to supplier to the extent of Debit Note. Whether full credit can be taken by consignee.Pl. quote some case laws.

Posts / Replies

[neesha upadhyay]

You can avail the credit on the amount after deducting Debit note amount.

[Naveed S]

Yes, i also agree that credit available after issuance of debit note can be availed. However, the quantity reflected in the books of accounts should tally with the balanced quantity after return of defective peices.

However, related records such as copy of debit note, purchas order, invoice, payment particulars, corrrespondence letters with the supplier etc. should be separately maintaned and shown at the time of audit by excise officers, if required.

[phani raju konidena]

Actually material supplier can claim the 'refund' for the value of difference, you can only take the cenvat credit on proportionate basis, otherwise it will come into the principle of unjust enrichment.  

[phani raju konidena]

Actually material supplier can claim the 'refund' on the basis of value of difference or he can take credit on the basis of 'Debit Notes' issued by the consignee if all the contents of the 'Debit Notes' are conformed to the Invoice under rule 11 of CER, 2002 [CCE, Indore Vs. Grasim Industries Ltd., (2011 (7) TMI 944 - CESTAT, NEW DELHI )], you are only eligible to avail the cenvat credit on proportionate basis, otherwise it will come into the principle of unjust enrichment.