Excise duty on returns

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V AGARWAL

Director

84 Points Posted on 10 January 2013

One of companies in AP sold goods to its client in Chennai. The company paid the Excise Duty on the sales to the Government,

Now they receive 50% of the material back because of some reason. The Chennai client did not make the payment inclusive of Excise Duty, instead made the payment without Excise Duty.

HOW CAN THE COMPANY CLAIM THE AMOUNT OF EXCISE DUTY PAID ALREADY TO THE GOVERNMENT.

a) What if the Return of the Material is through Excise Invoice?

b) WHat if the Material returned only through a DC only with original INvoice?

Important Please reply.

Replies (3)

Arun Kumar Singh

GST Advocate

13166 Points Posted on 11 January 2013

If inputs are short received and there is loss during transit, the goods short received cann't be termed as 'used in or in relation to manufacture'. Hence, cenvat credit on such short received inputs is not available - Carborandum Universal Vs. CCE (2008) 227 ELT 535.

V AGARWAL

Director

84 Points Posted on 11 January 2013

Agree Sir, But what do you do incase the goods has been returned due to Not anymore required by the chennai party and it has not been lost in transit or anything else..

Arun Kumar Singh

GST Advocate

13166 Points Posted on 11 January 2013

You can sale the goods without payment of excise duty to anyone because you have already paid the duty. You can't take the cenvat credit on duty paid on 50% goods.