Cenvat Credit On Rejected Return Goods

[Guest]

dear sir

we are plastic film manufacturer / exporter.

now my question is..........

we are sales finish goods to our customer with payment of duty,in the some cases part or whole material rejected by customer.

same material received in our factory with excise invoice issued by customer or our own invoice and same material quantity we credited in our RG-1 Register and cenvat credited in our RG-23-A-PART-II register as a credit.

now our quality person check this material and suppose material is not usable or reparable then we are convert in to scrap or waste.and sales this material as a scrap with payment of duty.

at the time of return goods we credit cenvat ₹ 1000/- for example

at the time of scrap sales we paid duty on scrap value ₹ 450/-

so please ask me about balance cenvat credit ₹ 550/- is reverse or not.

all material is PRINTED FORM.

we are waiting a valuable reply.

thanking u in advance.

AI Summary

Plastic Film Manufacturer Must Reverse Full Cenvat Credit When Returned Goods Sold as Scrap Under Section 3. A plastic film manufacturer inquired about handling Cenvat credit for goods returned by customers and subsequently sold as scrap. The manufacturer initially credited 1,000 for the returned goods but only paid 450 in duty upon selling them as scrap. Two respondents advised that since the goods were deemed unfit for sale or reprocessing and sold as scrap, the entire Cenvat credit of 1,000 must be reversed. They emphasized that scrapping does not qualify as a manufacturing process, and therefore, the credit cannot be retained.