Sales/Customer return material Scrap

[SNEHAL SHAH]

R/sir,

We are manufacturing of Chemical . We have sold the material to our party but due to technical problem this material was not accepted by party and reject . We have received this material u/r 16 (1)(2) and take cenvat credit on party invoice copy .

Now as per our chemical expert this material not able to resent to party and we want to send fresh material to party ( as a replacement ) and pay the Excise duty .

Our old rejected material will be either scrap or dispose off .

What implication in excise , please suggest us .

Thanks and Regards,

SNEHAL SHAH

AI Summary

Chemical Manufacturer Must Reverse CENVAT Credit on Scrapped Goods, Aligning with Legal Precedents and Expert Advice. A chemical manufacturer faced an issue where sold materials were rejected by a customer due to technical problems. The company took CENVAT credit on the returned goods but now plans to send fresh materials as replacements while disposing of the rejected ones. Experts advised that the manufacturer must reverse the CENVAT credit on the rejected goods since they will be scrapped. The situation aligns with legal precedents, which mandate reversing credit when goods are not reprocessed or resold. The manufacturer acknowledged the guidance provided by the forum participants.