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Duty on sales return

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raunak bajaj

Sr Exec

25 Points Posted on 05 May 2014

We are receiving back excisable goods once sold, now as field rejections. These sales returns are not being returned under the cover of excise documents. In 99% of the cases these goods are scraped only & no further process is carried on these goods except for analysis for finding faliure causes.

My questions -

1. Can i take Cenvat Credit on these items (not comes with prescribed document)

2. Is it beneficial in some or other manner to take the Cenvat Credit as anyways almost all of them are scrapped because as per Rule 16 we have to pay the amount taken earlier as credit & on disposal of scrap again pay the duty if any.

Please suggest.

Replies (1)

Harendra Kumar

Tax Advisor

1326 Points Posted on 05 May 2014

In this regard you cannot admissible to be taken Cenvat Credit due to reason the said material not covered the excisable documents and also not further processing for remade such material.

The Cenvat credit allow on return goods for further reprocessing/remade the said material and removable such goods on payment of duty.

Further it is requested to you plz deposited the said duty with interest otherwise facing the SCN at the time of Audit or point out by the range office through checking of ER-1 during the said period.