Shortage material received

[SNEHAL SHAH]

Sir,

 

We are purchasing chemical on daily basis from x company but Approx 7 to 8 times we had received material shortage ( above 15 % ) amount also huge ( taxable amount -- Rs.25000 ) .We have also take cenvat credit less & In stores MRN also book less but party take objection that why i am bare cenvat loss ?

 

Please suggest above issue ? In excise point of view what type of help giving to pary ?

 

Sachin

 

[Surender Gupta]

Cenvat Credit is available on the basis of material received in the factory. If you receive short material than mentioned in Invoice, you have no option but to avail cenvat credit proportionate to the material received in the factory.

However, if the loss is caused during the manufacturing process, there is no need of reversal or less availment of credit. But, your case is not falling in this category.

AI Summary

Concern Over Cenvat Credit Loss Due to Consistent Chemical Shortages Exceeding 15% from Supplier Under Review A party raised a concern about receiving a consistent shortage of chemicals from a supplier, with shortages exceeding 15% and a significant taxable amount involved. The issue involves the calculation of Cenvat credit, as the credit should be based on the material actually received. The party is questioning the loss of Cenvat credit due to these shortages. A response clarified that Cenvat credit should be availed proportionately to the material received unless the loss occurs during the manufacturing process, which is not applicable in this case.