Cenvat credit on Material received free of cost/Free replacement , Central Excise

[SNEHAL SHAH]

R/sir,

We are received input/Capital material Free of cost & duty involved in this consignment is Rs.40000=00 Approx . We have also received so many consignment ( Imported ) with payment of CVD and additional duty ( Total duty involved 75000=00 ) as a free replacement ( that means we are not sending regected material at outside india but party send material free replacement ) .

Now my question is that :

Is it we can availed cenvat credit on this material which was received under free replacement and free of cost basis ? for take a cenvat credit is it mandatory prepare GRN/Purchase order ?

Please guide to us sir ,

Thanks and regards,

SNEHAL SHAH

Posts / Replies

[Sanjay Bhalerao]

Cenvat credit is available on FOC material received as Cenvat credit is on receipt of Inputs and not on payment to supplier. 

Reg. GRN/Purchase order:- Any means which proves that material is received and used in the factory of manufacture is sufficient.

Regarding Material not sent back to supplier:- Attributable Cenvat Credit needs to be reversed in case no manufacturing activity is carried out on such material.