CENVAT CREDIT IN CASE OF RETURN OF CONSIGNMENT GOODS

[Prashant Agarwal]

I AM AN IMPORTER OF PLASTIC RAW MATERIALS AND HAVE ASSIGNED A CONSIGNEE AGENT IN OTHER STATES. BELOW IS THE CASE WHEREIN I URGENTLY NEED YOUR HELP

IN CASE WHERE PARTY A SENDS THE GOODS TO PARTY B UNDER A CONSIGNMENT AGREEMENT AND PARTY B SELLS THE GOODS TO PARTY C WHO THEN REJECTS THE GOODS AND RETURNS THE SAME TO PARTY B. CAN PARTY B RESEND THE GOODS BACK TO PARTY A AND REVERSE THE EXCISE DUTY THEREIN ??? IF YES THEN WHAT PROCEDURE IS TO BE FOLLOWED

PLEASE REPLY

AI Summary

CENVAT credit on sales returns available if Rule16 procedures and original excise invoice requirements are satisfied; factory receipt may matter.
CENVAT credit can be claimed on consignment sales returns treated as a deemed input under Rule 16 of the Central Excise Rules, which prescribes no time limit for taking back sales returns; Rule 4 of the CENVAT Credit Rules does not curtail this availment. Claim must be supported by the original excise invoice specified in Rule 9(1) of the CENVAT Credit Rules and matching particulars. If returned goods are not received in a factory, Rule 16 may not apply and Rule 16(3) and Commissioner permission could become relevant.