Rejected goods not ret to factoty - reversal of cenvat

[venkat eswaran]

Dear sir / madam,

 

We have factory at chennai, T.N. and branch office at Delhi.  We suuplied goods to customer at Utter Pradesh. This has been rejected and rejected goods were sent to our Delhi branch not coming back to our factory.

My question is whether we can reverse the Cenvat Credit and CST amount for the rejected goods or not since it is not coming back to factory

 

Venkat

 

[Mahir S]

I assume your question is regarding AVAILING of cenvat credit and not REVERSING of cenvat credit for the rejected goods.. Please ckarrify..

 

[venkat eswaran]

Naveed  Sir,

U r right it is AVAILING OF CENVAT CREDIT only not reversing the cenvat credit. 

Venkat

[Mahir S]

Regarding returned/rejected goods, the assessee can avail Cenvat credit either - 

·  On the basis of sender's excise invoice under which he sends the goods to the factory, or

·  On the basis of manufacturer's own invoice (triplicate copy retained by the manufacturer earlier) which was raised when the goods were originally cleared.

Further Rule 16 applies only when goods are received in the factory (factory does not cover the office of assessee located outside the factory).

Hence in your case the Cenvat Credit cannot be availed till the rejected goods are returned back in your  factory premises.

AI Summary

Cenvat credit availability requires rejected goods to be returned to the factory before credit can be availed.
Cenvat credit on rejected goods can be availed only when goods are physically returned to the factory; credit may be taken on the sender's excise invoice or the manufacturer's retained triplicate invoice, and Rule 16 applies solely upon receipt in the factory, excluding branch or office premises located outside the factory.