TMI BlogGoods rejected from our customerX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, Please resolve my query!! We have supplied our Final product to our customer and our final product will be a part of a machinery for our customer . Our customer used our product and in manufacturing process They came to know some fault in our product and their one raw material , say X got attached with our product, say Y,. Now customer raised one invoice i.e. rejection invoice for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our product because of some fault and raised one debit note of their another raw material which wasted because of our product and returned both material physically in our factory. Now my question is our customer while raising debit note reversed cenvat credit or we can say charged some excise duty then what should we do whether we will take benefit of cenvat credit which our customer charged fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m us because this material we have never sent to our customer that why we can not say that this is our sale return ?? Please suggest, Thanks in advance. - Reply By KASTURI SETHI - The Reply = Sh.Prem Bajaj Ji, Can you use the returned goods (both) in the manufacture of any dutiable final product ? - Reply By Prem Bajaj - The Reply = No sir both products are waste/ scrap for us. - Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By Ganeshan Kalyani - The Reply = Sir , if you cannot use the returned goods in the manufacture of duitable goods then credit cannot be availed. Thanks. - Reply By KASTURI SETHI - The Reply = Dear Sir, I fagree with Sh.Ganeshan Kalyani, Sir. You will have to bear the loss. Both are duty paid goods. Duty cannot be charged twice. So clear the said wast and scrap on excisable invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice at NIL duty giving the reference of both invoice. - Reply By Prem Bajaj - The Reply = Dear Sir, It means My rejected material is eligible to take credit but another material is not eligbile for credit we will suffer the loss on account of this. If i conclude i will take credit under rule 16 of CER 2002 and clear the goods as scrap and charge excise duty on this. And if i conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r another material which my customer reject i will not take credit of this but on account of sale of this scrap i will not charge excise duty as well because this is not my manufactured item. Please correct me if i am wrong. Thanks alot for giving your valuable time. - Reply By KASTURI SETHI - The Reply = Sh.Bajaj Ji, Rejected finished goods are eligible for cenvat credit only if the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame are to be recycled/used in the manufacture of dutiable final product. It is basic requirement that cenvatable inputs should be used in the manufacture of dutiable final product. No doubt scrap/waste is final product also. There is a great deal of difference between the transaction value of finished goods and scrap/waste (which is bye-product). You want to take credit of duty paid on final pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduct and clear scrap/waste as final produc t. How will you justify valuation ? You cannot justify such availment of input credit in any way. It will be a record based mistake. You do not fulfil the conditions of Rule 16 in this way . - Reply By Ganeshan Kalyani - The Reply = Sir, the excise duty on returned goods is eligible for cenvat credit, there is no doubt. The item which is sent to y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou along with your goods returned, is new to you then it can be construed then you have purchased it afresh. In this case you should be able to take credit, provided a condition that it said item should undergo a process and a distinct identity product should come into existence. In your case it is missing. Hence credit becomes ineligible. Thanks. - Reply By KASTURI SETHI - The Reply = Well expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by Sh.Ganesha Kalyani Sir. Now all doubts should be cleared to the querist. - Reply By Prem Bajaj - The Reply = Thank you so much kasturi sir and kalyani sir for giving your valuable time and suggestion. - Goods rejected from our customer - Query Started By: - Prem Bajaj Dated:- 9-7-2016 Central Excise - Got 9 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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