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

Cenvat credit reversal required when rejected goods are resupplied without manufacture, with clearance under invoice and duty payment. Where returned acid oil has not been subjected to any process amounting to manufacture, the seller must reverse the cenvat credit under the applicable central excise rule and clear the goods under invoice when resupplying, with duty payment on the resale; confirmation of whether any processing occurred is material to this treatment.