Warranty Claim

[RAJENDRA KHOMNE]

Sir,

In Sale against warranty claim, Excise duty is applicable or not.

We are selling material under warranty, if customer returned material to us against warranty and at the time of replacement of this material can excise duty applicable? Pl guide.

Thanks,

Khomne R. M.

AI Summary

Excise duty on warranty replacements: duty applies to replacement goods and assessable value includes packing and freight.
Excise duty is chargeable on replacement goods supplied under warranty; warranty obligations do not eliminate duty on new replacements. The supplier may take credit for returned goods and use it against duty on subsequent clearances, but must reverse credit where scrap is non excisable. Assessable value of replaced goods includes packing, freight and transportation charges. The expiry of returned finished goods may affect entitlement to credit under the returned goods credit mechanism.