Cenvat on rejection

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2011 X had billed a consignment to Y.
Y rejected the consignment and sent back with excise invoice. X would like to sell off this material in transit to Z - with endorsement on the excise invoice raised by Y. Can Z avail cenvat credit - is there a provision available for this?

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
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12 April 2011
See in this case
Very first credit is passed to Mr . Y who later rejected goods as well as credit for excise and Mr X recorded that in RG 23 A PART -II .
It means that invoice been canceled .and the same can not be endorsed but if Mr X not availed the credit and endorsed that credit To Mr . Z by giving the reference of above invoice than only Z can avail credit .
Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

12 April 2011 In this case, X has not received back the material and did not avail back the cenvat credit. The material is transferred to some other party (Z) who has accepted the material with deviation - how will the excise be passed on to Z with the excise invoice of Y. Can you also give any relevant rule available for this.
thanks

U S Sharma

U S Sharma (Expert)
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15 May 2011 on Rejection Y has to send back the goods to X under invoice and reversing the duty of input credit on the basis of which X will take credit back and issue invoice to Z

alternate

Y has to issue a letter to X stating the return of goods, and clearly mention that they have reversed the input credit availed on the invoices, he has to get it certified by his range superintendent, and send it to X

X will take back credit of such credit, and issue fresh invoice to Z

in no case Z can claim input credit on the invoice issued to Y

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