Sales return - reversal of excise and CST

[venkat eswaran]

sir,

we have factory and registered office  at chennai and having branch at Delhi. We sold goods one of our customer at  Utter pradesh.  Matl has been rejected and returned to our Delhi office. All stocks at lying at our delhi offic now.

My question is can i reverse the Excise duty  & CST  paid for the rejected itmes here at chennai. Delhi office  not dealing excise  registered only Delhi VAT.  Since excise duty and CST paid at chennnai can i reverse all this amount?

kindly give your valuable advice.

[YAGAY andSUN]

As per Rule 16(1), if duty paid goods are brought to Factory for being re-made, refined, re-conditioned or for any other reason, assessee should take CENVAT credit of duty paid as if such goods are received as inputs under CENVAT credit Rules and utilise the credit according to CENVAT credit Rules.  Goods can be brought 'for any other reason.  Thus, if goods are returned to assessee by buyer as they were in excess or if buyer refuses to accept the goods , the goods can be brought back.  There is no time limit for bringing goods for repairs and goods can be brought any time.

This procedure applicable only if goods received in factory - In NCL Secolar Ltd. v CCE (2004 (10) TMI 404 - CESTAT, BANGALOR) = 2005 (179) ELT 485 (CESTAT), it was held that procedure under Rule 16 (that time rule 173H) applies only when goods are received in the factory.  The procedure does not apply when the goods are returned to office outside the factory and despatched from there.

Sales Return under VAT/CST Laws, should be happen within Six Months from the date of issue of invoice and also come to the factory premises, otherwise no credit of CST will be allowed.

 

[suraj agarwal]

where it is mentioned that the goods must be received back in the factory premises?? @ Venkat

AI Summary

CENVAT credit on returned goods requires physical receipt at the factory; branch handling may prevent excise and CST credit. Under Rule 16(1) CENVAT Credit Rules, duty-paid goods returned and brought into the factory for re-making, reconditioning or any other reason qualify for CENVAT credit as inputs and may be utilised under the Rules. That procedure applies only when goods are received in the factory; returns to or handling from a non-factory office do not attract the Rule 16(1) procedure. For CST/VAT, sales-return credit is subject to the statutory sales return regime and generally requires goods to be brought to the factory premises for CST credit to be allowed.