Cenvat credit on material received free of cost

My company many a times as a part of sales & promotion activity, provides goods free of cost (FOC) to first stage dealer/stockist. Company pays the excise at the time of removal of goods from factory to it's depot/warehouse. Now dealers/stockist are requesting to pass on excise paid on such FOC goods. My question is 

1) Can company pass on the excise paid on such goods, considering the fact first stage dealer will not use this for any manufacturing activity? 

2) Can first stage dealer pass on this to second stage dealer/ultimate consumer?

Thanks in advance for your help.

 

Replies (4)
Yes dealer can pass on the duty to 2nd stage dealer.
Input to Fsd will be at no cost and hence cenvat benefit can not be availed by fsd. You cannot transfer cenvat benefit to them
1) Yes Company has to (not may) charge excise duty even on goods given free of cost to FSD 2) & yes FSD can pass cenvat credit to ssd even on goods received free of cost Regards CA Harshal Pahade Contact 9272344759

firmly agree with Harshal as excise duty will be paid even if the goods are supplied free of cost in any form (say promotional scheme or sample purpose or whatever name called) 

as the excise duty is paid cenvat credit can be availed therefore on the basis of invoice issued.

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