Canvat Credit on sales return material

[Swapneswar muduli]

Dear Sir,

We are a manufacturer and we sale the goods from factory to our depots and from to they sales to various sales branches all over-india. After some months or some years these material are send back to our factory for different reason like

(1) Customer rejection,

(2) Repacking and putting the new MRP.

(a) In such case the branches are send material direct to factory with commercial invoice which materials are not sale by factory to this branch we sale to our Depot. Depot sales to our sales branches.

(b) Depot also send back us the old material with their commercial invoice what ever ols stock laying in the sales depot in that case they are not tracking the material that on which excise factory invoice they received these material from factory.

After receiving these material we putting new MRP and repacking these ans sale into the depot again.

Please guide me in the above mentioned case eligible of Cenvat credit and how we show this stock in RG-1 as we further sales these material again with the excise invoice.

Regards

Swapneswar Muduli

AI Summary

Manufacturer Questions Cenvat Credit on Repacked Goods Under Rule 16 of Central Excise Rules; Documentation and Compliance Critical. A manufacturer inquires about Cenvat credit eligibility on returned goods that are repacked and resold. The discussion revolves around Rule 16 of the Central Excise Rules (CER), which allows credit if the returned goods undergo manufacturing. If repacking does not qualify as manufacturing, credit cannot be claimed. Proper documentation, such as linking depot and factory invoices, is crucial. Suggestions include sending new MRP stickers instead of recalling goods to avoid transportation costs. Compliance with the Legal Metrology Act is emphasized, as non-compliance could lead to penalties.