GOODS RETURNED

[SURYAKANT MITHBAVKAR]

We are manufacturing Pharmaceuticals machinery registered under Central Excise Act.

We have received machine returned from our customer. The same machine earlier supplied by us in the year 2003.The customer has issued us transfer invoice showing removal of Capital Goods as it is under Rule 3 Sub Rule '5' and reversed credit as per Not. No. 39/2007-CE(NT) Dated 13.11.07.

In view of the above please clarify the following point.

Since the machine is too old we are not able to do rework in the same machine and to sell the other customer. Can we dismentle and used the same parts to manufacturing our other machine wherein not possible to produce identification of parts used in different machine to the department. In short we will take credit as our input.

Pl. advice.

AI Summary

Pharma Machine Return: Credit Denied for Parts Dismantling Under Rule 3(5); Case Suggests Re-manufacture Eligibility A company manufacturing pharmaceutical machinery under the Central Excise Act received a returned machine from a customer, originally supplied in 2003. The customer issued a transfer invoice under Rule 3, Sub Rule 5, reversing credit per Notification No. 39/2007-CE(NT). The company inquired if it could dismantle the machine and use the parts for other machines, despite being unable to identify parts for tax purposes. Replies indicated that credit would not be eligible as the machine was not returned for repair, and the customer could not clear the machine after years of use and depreciation. A cited legal case supported credit eligibility for re-manufactured goods, suggesting potential applicability to the company's situation.