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Return Materials

hari (excise incharge) (102 Points)

22 May 2009

We have received back some materials under quality complaint. We have taken the credit on receipt of materials in ourRG-23, while clearing the materials we have paid duty on present day's rate (.i.e. lower than the previous one) I want to know that whether we have to reverse the same excise as credit taken by us. The department is demanding differential duty from us. Please advise.

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Sachin Adsul (HOD Excise dept) (178 Points)
Replied 23 May 2009

Originally posted by :hari
"	We have received back some materials under quality complaint. We have taken the credit on receipt of materials in ourRG-23, while clearing the materials we have paid duty on present day's rate (.i.e. lower than the previous one) I want to know that whether we have to reverse the same excise as credit taken by us. The department is demanding differential duty from us. Please advise.	"

Hari you have to debit duty asper credit taken on return good i.e. not less than credit taken.

Arun Kumar Singh (GST Advocate) (15188 Points)
Replied 23 May 2009

If the buyer returns the rejected inputs without availing cenvat credit, he may return the goods along with the invoice of original manufacturer. In such case, cenvat credit is avilable to original manufacturer on the basis of his own invoice and obviously it is a duty paying document.

Rajeev Nair (Finance Professional) (510 Points)
Replied 23 May 2009

Dear Hari, I understood that you h've first sold the machinery say @ 10% Duty and then received the same from your customer by availing the same i.e.10% due to rejection. In this case where's the point of differential duty.

And when you are selling the same again, i hope you h've charged the applicable rate of duty as per the Excise rules -