GOODS RETURN

[SURYAKANT MITHBAVKAR]

 

We are manufacturer of Pharmaceuticals Machinery. We cleared one machine to our customer in 2011 now the same customer intend to return the same as sale of assets to us with payment of duty.

If  the said machine we take as input &  dismantle the parts &  use the parts in various machinery wherever

suitable and some parts  cleared as scarp.

 In this procedure  we do not have any co- relation regarding clearance of machine parts of the said    

machine.

Whereas the Law says if  we take credit on  Finished Goods which is return by our customer it is importance

to show clearance of the same with payment of Excise duty either equal to credit or more than credit avail. 

Still can we avail credit in the above matter.

Pl. advice. 

[PAWAN KUMAR]

As per my view , in rule 16 it has specified that when any goods is brought to any factory for being re-made, manufacturer can claim cenvat as input and process the same. If the process does not amount to manufacture, reverse the cenvat taken. if the process is amount to manufactuer pay the duty on rate at the time of removal and on the value as determined.

AI Summary

Cenvat credit on returned finished goods may be claimed when goods are brought for re-making, subject to reversal. When a previously sold machine is returned and brought to the factory for re-making, the manufacturer may treat it as an input and claim CENVAT credit under the re-making rule; if the processing does not amount to manufacture the credit must be reversed, and if it does amount to manufacture duty is payable at the applicable rate and value at removal. The claimant must ensure either corresponding clearances with excise duty equal to credit taken or reversal of credit as required.