Conversion of RG-1 Stock

[Guest]

Dear Sir,

We are having some stock of finished goods (assembled and appearing in Daily Stock Account / RG-1 say as Product A) which has no market; however there is a market for inputs used in the manufacturing of said Product A. In order to liquidate stock, we propose to sale inputs used in the said Product A in the market after doing dismantling work. Needless to mention that, we had availed Cenvat credit on the inputs used for manufacturing Product A.

Now Query is that:-

1- Do we have any excise liability in case we decide to dismantle the Product A? The process, we would to adopt, will be to issue the Product A again to manufacturing shop and perform dismantling operation.

2- Can we take back all the inputs to stock?

3- Can we sale these inputs on market value but discharge excise duty equal to CENVAT claimed at the time of purchase?

4- Do we need to reverse CENVAT on the inputs used in manufacture of Product A but became unusable / scarp while performing dismantling operation?

Regards,

Rahul Patel

AI Summary

Company Considers Dismantling Product A to Sell Inputs; Seeks Guidance on Excise Liability and Cenvat Reversal A company is considering dismantling a finished product, Product A, which lacks market demand, to sell its inputs, for which there is a market. The company had previously availed Cenvat credit on these inputs. They are inquiring about excise liability if they dismantle Product A, whether they can restock the inputs, sell them at market value while discharging excise duty equal to the Cenvat claimed, and if they need to reverse Cenvat on inputs that become unusable during dismantling. The response advises seeking permission from Central Excise authorities and complying with conditions for converting finished goods back to inputs.