cenvat credit

[Anil Jangid]

X party received the goods form our Uttarakhand base customer as a rejection with invoice.This invoice is not under rule of excise,but they had include the excise duty amount in basic rate because during removal from our end the excise duty was charged.Please advice that can x party take the cenvat credit against this transaction.

[Ganeshan Kalyani]

Whether party X is a manufacturer or what is the status ?

[Anil Jangid]

x Party Manufacturer

[Ganeshan Kalyani]

X has procured the material from you by paying excise duty charged by you on invoice further he has sold it to your customer from his location as it is by an invoice which is inclusive of excise duty and hence he has not carried out any activity on the said material therefore the credit is not eligible to him on the material being rejected.

[Ganeshan Kalyani]

Mr. Anil ji hope your query is resolved.

[Mahir S]

Sir,

X party cannot take cenvat credit against this transaction.

AI Summary

Cenvat credit denied where recipient received rejected goods under excise-inclusive invoice and performed no processing.
Where a manufacturer procures goods as a rejection under an excise-inclusive invoice, receives and resells the goods without performing any processing or manufacturing activity, the recipient is not entitled to claim cenvat credit; mere payment of excise-inclusive price and onward sale of unchanged goods does not create credit eligibility.