CENVAT Reversal against sample testing

[Rajesh Purohit]

Kind attn. Kasturi Sethi Sir

A pharmaceuticals manufacturer have to test their each and every batch in house (not sent out side) before final packing.

Although Chapter11 provide 'NO DUTY ON SAMPLE'' until cleared/removal from the factory. But can department demand reversal of CENVAT against sample used for testing ? whereas this testing is part of manufacturing process.

Please cleaify all the experts

AI Summary

Pharma Manufacturer Questions CENVAT Credit Reversal on In-House Testing Samples; No Reversal Needed per Chapter 11. A pharmaceuticals manufacturer inquires whether the Central Excise department can demand a reversal of CENVAT credit for samples used in in-house testing, which is part of the manufacturing process. The concern arises despite Chapter 11 stating no duty on samples until removal from the factory. An expert clarifies that if the final product is dutiable, no CENVAT credit reversal is needed for samples used in the manufacturing process, as it constitutes captive consumption. Relevant notifications and circulars support this position, and further queries are invited for clarification.