Sale of by product

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“A”  entered in to agreement with “B” for processing the excisable goods. All raw materials billed to “B” and will be provided by “B” to “A” for processing.  “A” will get processing charges from “B” in consideration.  All finished goods will belong to “B” except the “By Product” which "A" can retain and sell.

Now my question is- Can “A”  sell this “By Product” to “B” or other party.  If yes what will be the entries in respect of excise and vat. How could "A" bring this product in it's stock for further transaction.

Please provide your expert opinion on this matter

Diwakar Rege

 

Replies (2)
yeah.. okeyz i also want to know

ITS A SCRAP WHICH IS GENERATED DURING MANUFACTURE PROCESS.

AS PER RULE IT SHOULD BE RETURN BACK TO THE PRINCIPLE MANUFACTURER

THEN HE WILL CLEAR IT ON PAYMENT OF DUTY.

IN THIS CASE , THE PRINCIPLE MANUFACTURE HAS TO REVERSE THE CENVAT ON PROPORTIONATE INPUT OF SCRAP OR PAY DUTY ON SCRAP VALUE


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