Reversal of Cenvat credit

[srinivasan.K kuppuswamy]

Sir,

We are placing the purchase order on supplier to supply the goods. We do not know whether the ordered material is manufactured by them or the same purchased outside and removed as such.

The invoice as per Rule 11 from the supplier is the base document for Cenvat credit and we availed cenvat credit.

If the supplier has passed on excess cenvat credit through invoice to their buyers, whether the buyers has to reverse the cenvat credit for which all the payments for the supplies made to supplier.

Please provide the favourable orders .

Kind regards

K Srinivasan

AI Summary

Reversal of Cenvat credit disputed where supplier overcharged duty; buyer's right to credit depends on payment and removal rules.
When a buyer avails Cenvat credit on a supplier's invoice indicating duty, the buyer's entitlement to retain that credit depends on whether the buyer actually paid the duty and whether any provision requiring payment on removal of inputs as such applies; administrative advice varies from mandatory reversal via debit note to preservation of a vested right to credit, with a practical option to reverse under protest and seek a speaking order if authorities insist.