Goods Purchased but not suitable for us., VAT + CST

[gowri shankar]

Dear sir,

 

We have purchased a Machinery Spare Parts from a supplier in coimbatore 9 months before.  We have used the same and found that it has not been suitable for us.  Now we can send it to another Paper Mill within the state.  What is the Procedure with regard to Vat to send the part to some other paper mill.

We have the following Doubts?

1. Whether we can raise an invoice as a scrap in our letter pad or a sheet to begin with new serial Number buyer name and address and calculate vat (T.N) and net amount with signature of Management.  Attaching with a copy of our purchase invoice.

2. Whether along with this any "Whomsoever it may concern" letter explaining that it is not suitable for our requirement hence we are sale as a scrap to another paper mill on payment of vat (T.N)

3. If it is a excisable spare parts what is the procedure as per central excise?

 

Please send reply.

 

2. Whether  

Posts / Replies

[Naveed S]

The reply is in respect of point 3 above regarding central excise procedure :

As per sub rule 2 (a)  of rule 4 of  Cenvat Credit Rule, 2004 the CENVAT credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if such capital goods are cleared as such in the same financial year.

The spare part were purchased only 9 months back and are required to be cleared in the same finacial year. As 50 % of the cenvat credit is already availed, the remaining 50 % credit should now be availed. Thereafter, Excise invoice should be raised and proportionate credit should be reversed at the time of clearance of such goods. On the top of the invoice -USED CAPITAL GOODS REMOVED AS SUCH should be boldly typed/hand written.

A separate file for receipt and clearance of goods removed as such should be kept handy for cross verification by Excise officials at the time of Audit. A separate note should also be inserted in the monthly RT 12 returns and details of such clearancs should also be mentioned in the forwarding letter submitted with such monthly returns.

However, it is not clear as to how A spare part puchased only 9 months back and not suitable for self ( but in working condtion) is now required to be cleared as SCRAP...