Availement of Cenvat Credit on Returned Goods

[SURYAKANT MITHBAVKAR]

We had cleared goods to our customer who is not registered under C. Excise Act on payment of excise duty. The same customer want to do partial goods return to us.

Since he is not registered under C. Excise how he will pass on partial Excise duty on returned goods unable us to take credit on returned goods.

[Rajagopalan Ranganathan]

Sir,

If your customer is not registered under Central Excise Act, 1944 and under rules made thereunder. you can take the credit on the basis of triplicate invoice available with you. You preserve the intimation sent by your customer explaining reasons for partial return of the goods so that the Departmental Authorities can be satisfied that the goods were returned by your customer who is not registered under Central Excise Act, 1944. There are a lot judgments of CESTAT allowing such credit. If the department still disputes the credit taken by you and issue notice to you you may write to me so that I may draft a suitable reply and send it to you. Or you can avail the service of a consultant available in your area for the purpose.

[VVFINDIA Taloja]

Dear Mr. Surya,

As rightly said by Mr. Rajagopalan, you can refer your own invoices for taking credit on returned goods. You need to maintain register for accounts of these returned material as per rule 16 of CENVAT Credit Rules, 2002. MAke sure you have filed an intimation to department regarding the receipt of the returned goods.

AI Summary

Cenvat credit on returned goods: invoice evidence and departmental intimation enable taking credit after unregistered buyer returns items.
Cenvat credit on returned goods may be claimed when goods cleared to an unregistered purchaser are returned, provided the manufacturer retains triplicate invoices and a written intimation from the buyer explaining the return. The manufacturer must maintain a register for returned material as required by rule 16 of the CENVAT Credit Rules and file intimation to the department documenting receipt of the returned goods to substantiate the credit claim.