Cenvat credit on the basis of debit note in connection of negotiate the price of goods later on after despatch the goods.

[SHIVKUMAR SHARMA]

Dear Expert

We have Cleared the goods to our Customers as per verbal discussion over phone & later on we have finalise the price of goods with the customer & the same is on lower side accordingly our customer is

raise a debit note for the excess amount showing excise duty separately because he is not registered with the central excise & not taking cenvat credit.Pls.clarify  whether we can avail the cenvat credit on the Debit note issued by our customer on the basis of  price difference of our finished goods.

 

[PAWAN KUMAR]

As per my view, there are two options :

1.Take cenvat credit on your own invoice. Keep the copy on invoice along with the debit note received from your customer and a copy of the p.o. Also intimated your range superintendent and remark in the Excise return that excess duty was paid which accordingly re-credited towards the invoice.

2.Filed the refund of excess excise duty paid to the department.

 

[phaniraju konidena]

My dear Sharma,

You can take the cenvat credit on the basis of 'Debit Notes'. In the case of Mahanagar Gas Ltd., Vs. CCE, Mumbai-V (2013 (12) TMI 1385 - CESTAT MUMBAI)  the Tribunal while allowing the Stay has held that -

CENVAT Credit is available on the basis of debit notes provided all the ingredients as required in the invoices are contained therein - issue has been decided by Tribunal extending such benefit - prima facie case in favour - Stay granted: CESTAT [para 5]

Accordingly, you can tak, if all the ingredients are satisfied under Rule 9 of CCR, 2004.

With regards,

K.PHANI RAJU

AI Summary

Cenvat credit on debit notes permitted if debit notes contain prescribed invoice particulars; alternative is to claim refund. Cenvat credit can be claimed where a customer issues a debit note for a post dispatch price reduction, either by adjusting the seller's own invoice and retaining the debit note and purchase order while noting the adjustment in the excise return, or by seeking a refund of excess duty. Tribunal practice permits cenvat credit on debit notes if those notes contain all prescribed invoice particulars required for input credit claims and the statutory invoice ingredients are satisfied.