DUTY PAID ON CANCELLED INVOICE

[RAMAPPA SOMAKKALAVAR]

Dear Sir/Madam,

 

We are manufacturer of small commercial vehicle after completion of manufacturing process we have parked our vehicles in supply float area due during internal movement 10 vehicles got damaged, after that we have billed to Insurance company for claiming the insurance,

 

• Insurance company not interested to take our vehicles as those vehicles not covered by insurance policy. Hence vehicle are lying at our premises and we cannot bill it other customers due to damage.
• We have reversed the transaction next month in our system through cancelling the invoice
• While submitting (ER1) return we have debited excise duty in our register and we have reduced no of vehicle in our RG1 register
• There is no physical movement of vehicles
• After cancelling the invoice we have not communicated to excise department

 

Query.

1)      How to get these vehicles in to our RG1 register for increasing the inventory

2)      Can we avail cenvat credit based on our cancelled invoice

3)      Till today we have not given intimation to excise deprtment and those duty paid vehicles are lying at scrap yard

4)      What would be the excise dept view on this

 

Request you to kindly suggest on this

 

Thanks and Regards

RAMAPPA SOMAKKALAVAR

AI Summary

Manufacturer Faces Insurance Denial for Damaged Vehicles; Advised to Follow Rule 16(3) for CENVAT Credit Resolution A manufacturer of small commercial vehicles encountered an issue where 10 vehicles were damaged during internal movement and subsequently billed to an insurance company. However, the insurance company refused coverage, leaving the vehicles at the manufacturer's premises. The manufacturer reversed the transaction by canceling the invoice but did not inform the excise department. Queries were raised about re-registering the vehicles in inventory, claiming CENVAT credit, and potential excise department views. Responses advised notifying the excise department, following Rule 16(3) of The Central Excise Rule, 2002, and seeking a refund or credit through proper channels.