Removal of Scrap/Waste from factory after 17.03.2012

[vinay wakde]

We are receiving various capital goods & their components, spares & accessories etc against which we are taking CENVAT credit.  We are receiving different types of scrap/waste (i.e. of MS/SS/Rubber items etc) from our main plant. Prior to 17.03.2012 we have paid Excise duty as per the transaction value while removing such scrap/waste from our factory under cover of Excise Invoice.  Kindly suggest us the system to maintain the account of scrap/waste which co-relates the CENVAT credit taken to satisfy the Department that duty paid /reversed by us for removal scrap/waster after 17.03.2012 is on higher side, in view of changes in Rule 3(5A) after Budget.

Regards,

VINAY

 

[NANDKUMAR SAGWEKAR]

OK I can suggest the system for the same

 

 

Thanks

 

A M SHEMBEKAR

CELL NO. 9421187122

[YAGAY andSUN]

You would have to pay the Central Excise Duty on the waste and scrap of capital goods either on scrap value or transaction value, whichever is higher.

AI Summary

Excise duty on scrap: compute and pay duty on the higher of scrap value or transaction value to ensure compliance. Taxpayers who availed CENVAT credit on capital goods must value removals of scrap or waste for duty by applying the higher-of-values principle: compute duty on the higher of the scrap value or the transaction value. Maintain a reconciliation linking CENVAT credit on specific capital goods to quantities and values of scrap/waste removed, records of sale transaction values, and entries evidencing duty paid or credit reversed to demonstrate compliance with excise rule changes.