Cenvat credit on non excisable invoice

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2012 Let us suppose
A Ltd is in Excise Zone but B Ltd is in non Excise Zone
A Ltd sold goods to B Ltd
A Ltd issued excisable invoice and that goods now rejected by B Ltd and issued sales return invoice and excise not charge on that sales return invoice.
now please suggest me, is cenvat credit available for A ltd or not on sales return, with case and rule..........

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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30 October 2012 A ltd can take cenvat credit of duty paid.

See Rule RULE 16. of Central Excise Rules, 2002
Credit of duty on goods brought to the factory. —

(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.

(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.

Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.

(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2012 Thank you Ca dileep surya kumar..........

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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12 November 2012 AGREED WITH EXPERT....

Rule 16.
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Credit of duty on goods brought to the factory. -
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(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.

(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.

(3)If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner.

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