matl quality prblm - consumption loss - credit reversal, Central Excise

[venkat eswaran]

Sir,

We have paint mfg industry.  There is a quality problem at customer end and part qty he consumed as a quality analysis and testing purporse and rejected. actually we supplied 400 ltrs. but he returns only 300 litrs. balance 100 ltrs gone as loss in quality problem testing. how can i reverse the excise duty  and sales tax amt for total qty or whatever he returns qty? physicaly they retuend 300 ltrs only.

Posts / Replies

[Pradeep Khatri]

Please check Rule 16 of the CER,2002 as amended time to time, in this regard.  You may avail/reverse (as the case may be) the CENVAT credit only on 300 ltrs since 100 ltrs. of pain have not been returned to you.