Writte off some SFG Material and transfer to scrap location

[Swapneswar muduli]

Dear Sir,

we write-off some stock like (SFG & R.M )and same items are transfer to scrap location. and when we clear the scrap from factory we paid Excise duty on that scrap.

So in this above case we need to pay Excise duty for the write off the SFG and R.M or not ?

Swapneswar Muduli

AI Summary

Excise Duty on Write-Off: Pay Duty on Scrap Transfer of Semi-Finished Goods and Raw Materials per Rule 3(5B) CENVAT Credit Rules. A discussion on whether excise duty needs to be paid when writing off semi-finished goods (SFG) and raw materials (RM) and transferring them to scrap. The initial query asks if duty is payable for the write-off. One response clarifies that if SFG is removed with duty payment, credit on inputs need not be reversed, and for RM, duty should be paid on the higher of transaction value or credit taken. Another response cites Rule 3(5B) of CENVAT Credit Rules, 2004, requiring credit reversal if input value is fully written off. A third response concurs with the first reply.