Goods Rejection

[george thomas]

Dear Sir,

We have sold acid oil to some party and paid duty ,due to quality rejection party rejected part material for the same we have taken cenvat credit Under 16.

Again we have supplied material to party equal to rejected qty by paying duty.

20042/09.01.2015 16.51 MT ( Originally Sent)

272/09.03.2015 8.360 MT ( Party rejected the materials)

20049/12.03.2015 8.360 mt ( Resold to party)

Kindly give the procedure to be followed regarding Cenvat and Excise Duty

[Rajagopalan Ranganathan]

Sir,

Since you have not subjected the returned acid oil to any process which amounts to manufacture, you can clear the said acid oil after reversing the credit taken under rule 16 of Central Excise Rules, 2002 under the cover of your invoice.

[KASTURI SETHI]

Sh.George Thomas Ji,

You have not mentioned what processes were undertaken on the rejected goods. Your query is incomplete.

[DR.MARIAPPAN GOVINDARAJAN]

The querist is to give complete details otherwise no clear cut opinion can be given.

AI Summary

Guidance Sought on Cenvat Credit Reversal Under Rule 16 for Rejected Acid Oil Resupply and Excise Duty Handling A company sold acid oil, paid excise duty, and faced a quality rejection from a buyer, who returned part of the material. The company reclaimed Cenvat credit under Rule 16 and resupplied the equivalent quantity, paying duty again. The query seeks guidance on handling Cenvat and Excise Duty for this transaction. One response advised reversing the credit under Rule 16 since no manufacturing process was involved. Another response noted the lack of details about processes on the rejected goods, indicating the need for more information to provide a clear opinion.