CAPITAL GOODS RETURNED

[SURYAKANT MITHBAVKAR]

We have sold one machine to our customer two years back. Now that customer returing the same machine to us. While returing the machine they have reduced basic price of machinery due to depreciation (as per Income Tax Act) but they have reversed full excise duty whatever they have taken credit originally (As per Excise Act)

 Excise duty is charge in their Invoice is not exact percentage on Basic Price of Invoice (excise duty is orginally credit they have taken)

In above case can we show such Goods as our Input ant avail credit of full excise duty or we can show that machine bringing for repair purpose and avail  Cenvat credit of full excise duty.

pl Advice

AI Summary

Can a Company Claim Full Excise Duty Credit on Returned Machine Under CENVAT Credit Rules, 2004, Rule 3(5) & 3(5A)? A company sold a machine to a customer two years ago, which is now being returned. The customer has reduced the machine's basic price due to depreciation but reversed the full excise duty credit initially taken. The issue is whether the company can treat the returned machine as input and claim full excise duty credit or consider it as returned for repair and still claim the credit. The response suggests referring to Rule 3(5) and 3(5A) of the CENVAT Credit Rules, 2004 for guidance on handling such situations.