REJECTED GOODS RETURNED BACK

[SURYAKANT MITHBAVKAR]

One of our Overseas Customer returned goods on account of rejected materials while clearing the materials from custom Department  our agent has cleared Goods without paying custom duty whereas he has paid CVD on assessable Value .

Pl. advice can we take credit on that CVD treating as Goods rejected and returned  under Cenvat credit Act and clear same material with payment of excise duty to local customers.

If any  problem arise due to non payment of custom duty while taking credit.

 

[YAGAY andSUN]

You avail the CENVAT credit on rejected goods treating the goods as inputs under the Rule 16 of the Central Excise Rules 2002.  Further, these goods may also be removed to local customer provided you would have to provide intimation to the concerned customs authorities because at the time of re-import you had not paid the duty and may had given some sort of undertaking regarding re-exportation after getting these goods repaired.  please check the facts and then act.

AI Summary

Cenvat credit on returned rejected goods permitted; notify customs if import duty was not paid before local clearance. Returned rejected goods can be treated as inputs for Cenvat credit and credit may be availed on duties paid, but where goods were cleared without payment of customs duty the recipient must intimate customs before removing the goods to local customers because prior undertakings or conditions at re-import may affect compliance.