Cenvat Credit On Rejected Return Goods

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..... Cenvat Credit On Rejected Return Goods
Query (Issue) Started By: - Bharat patel Dated:- 11-6-2015 Last Reply Date:- 11-6-2015 Central Excise
Got 2 Replies
Central Excise
dear sir we are plastic film manufacturer / exporter. now my question is.......... we are sales finish goods to our customer with payment of duty,in the some cases part or whole material rejected by customer. same .....

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..... material received in our factory with excise invoice issued by customer or our own invoice and same material quantity we credited in our RG-1 Register and cenvat credited in our RG-23-A-PART-II register as a credit. now our quality person check this material and suppose material is not usable or reparable then we are convert in to scrap or waste.and sales this material as a scrap with payment of .....

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..... duty. at the time of return goods we credit cenvat ₹ 1000/- for example at the time of scrap sales we paid duty on scrap value ₹ 450/- so please ask me about balance cenvat credit ₹ 550/- is reverse or not. all material is PRINTED FORM. we are waiting a valuable reply. thanking u in advance. Reply By Rajagopalan Ranganathan: The Reply: Sir, Since the returned material .....

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..... is found to be unfit for sale or for reprocessing and sold as scrap you have to reverse the entire credit of ₹ 1,000/- taken since scrapping is not a process of manufacture. Only when the returned goods are suject ro a process amount to manufacture , you can clear the resultant product on transaction value. Otherwise you have reverse the credit taken on the returned goods. Reply By Mahir S: .....

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..... The Reply: Yes sir, in your case cenvat credit of total ₹ 1000/- is required to be reversed, as explained above. It would be advisable to first verify whether the returned goods can be re-processed or not.
Discussion Forum - Knowledge Sharing .....

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