Rejected goods

[ASHOK AMIN]

Dear Experts,

We received two excisable raw materials from a supplier in the same invoice. Before taking the cenvat credit we normally check the raw materials in our laboratory deptt. If it is ok we avail cenvat credit on it. In this case one of the item got rejected. Now please let us know how to deal with it.

AI Summary

Cenvat credit reversal: reverse credit for rejected inputs and apportion credit to accepted items accordingly.
If cenvat credit on a rejected input was not availed, no action is required; if availed it must be reversed, and if utilised the reversal attracts interest. When an invoice covers both accepted and rejected inputs, apportion the credit to the accepted item, reference the original accounting serial when reversing the rejected item, and alternatives include returning the rejected material on payment of duty equal to the credit taken so the supplier can claim market-return relief.