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TMI BlogCanvat Credit on sales return materialX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, We are a manufacturer and we sale the goods from factory to our depots and from to they sales to various sales branches all over-india. After some months or some years these material are send back to our factory for different reason like (1) Customer rejection, (2) Repacking and putting the new MRP. (a) In such case the branches are send material direct to factory with commercial inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oice which materials are not sale by factory to this branch we sale to our Depot. Depot sales to our sales branches. (b) Depot also send back us the old material with their commercial invoice what ever ols stock laying in the sales depot in that case they are not tracking the material that on which excise factory invoice they received these material from factory. After receiving these material w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e putting new MRP and repacking these ans sale into the depot again. Please guide me in the above mentioned case eligible of Cenvat credit and how we show this stock in RG-1 as we further sales these material again with the excise invoice. Regards Swapneswar Muduli - Reply By ashish chaudhary - The Reply = Two questions are relevant to discuss: 1. Whether credit is admissible on returned g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods received in the factory? Manufacturer, under Rule 16 of CER, can take the credit of excise duty originally charged as if the goods received are inputs. If the process undertaken on the returned goods amount to manufacture, their subsequent clearance is required to be made charging excise duty. If no manufacturer, credit taken earlier is required to be reversed. In your case, you have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een undertaking deemed manufacturing activity, hence eligible to take credit on receipt of returned goods. 2. On what documents can the credit be taken? Credit can be taken based on the copy (say triplicate copy) of excise invoice originally issued. If sold through depot, suggested to establish the correlation of goods originally cleared and returned back. Could be done by insisting branches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to mention depot invoice number on their commercial invoice, description of goods and establishing correlation of factory challan/invoice with depot's invoice. Without correlation, department objection likely. Returned goods could be considered as inputs for all the purpose under Cenvat Credit Rules. - Reply By YAGAY AND SUN - The Reply = Rule 16 of CER 2002 is relevant in this ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter. Please go through it, read it, understand its implication then apply in your matter. - Reply By Mahir S - The Reply = Sir, Rule 16 is applicable only if some manufacturing activity is undertaken on the returned goods. Agreed that the returned goods are re-packed and new MRP is put thereon; however packing and repacking does not amount to manufacture for all the goods, but only for su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch goods specifically allowed under Tariff notes. So , if packing and repacking of returned goods does not amount to manufacture for your product, which i do believe it ; then you cannot avail cenvat credit on such returned goods. - Reply By MUKUND THAKKAR - The Reply = Dear Sir, According to your querry you need to putting new MRP which stock laying at your depot. my suggestion is instate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of calling back to material and spending transportation expenses. you have to sending new stickers with MRP and pay the differntial duty from you unit under reference of initial clearance to your depot. - Reply By YAGAY AND SUN - The Reply = Dear Swapneswar, First of all Rule 16 would be applicable even if goods are being called off for any reason. Secondly, Legal Metrology Act read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th LM (PC) Rules, 2011 as amended by 2015 Rules, do not permit to put a sticker to change the MRP. In the case of non compliance, the notice would be served on the Nominated Director. Hefty penalty can be imposed also. This is for your kind information. Regards, YAGAY and SUN ( Management, Business and Indirect Tax Consultants ) - Canvat Credit on sales return material - Query ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Started By: - Swapneswar muduli Dated:- 3-11-2015 Central Excise - Got 5 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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