TaxTMI 
TaxTMI 
A manufacturer imported an item which he uses in manufacture as raw material. If he issues that material to customer as replacement(under warranty), should the manufacturer reverse the cenvat credit availed?
reversal of cenvat credit
07 Jul 2016 
3 Replies 
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Cenvat credit reversal required when imported inputs are supplied as warranty replacements, reclaimable if later used in manufacture.
A manufacturer must reverse cenvat credit when an imported input, though availed as credit, is not used in the manufacture of dutiable goods but is supplied as a warranty replacement; credit is tied to use in or in relation to manufacture, and may be reclaimed if replacement goods are later received and used. (AI Summary)
A manufacturer must reverse cenvat credit when an imported input, though availed as credit, is not used in the manufacture of dutiable goods but is supplied as a warranty replacement; credit is tied to use in or in relation to manufacture, and may be reclaimed if replacement goods are later received and used. (AI Summary)