Asset Under Warranty

[Prashant soman]

Dear Sir/ Madam,

We have certain Asset capitalised in our books . The same is also covered under warranty from vendor, now that asset got failed and for that we will get free of cost replacement from vendor. now issue in front of us is that as we have said asset in FAR can we do the replacement process through 57F4 or we should go for asset scrapping and bringing new asset under new invoice from vendor, please guide

Many Thanks

[YAGAY andSUN]

First of all please check your agreement/contract/purchase order regarding warranty claims.  If the terms are in your favour then you may get it replaced from the supplier.

Challan under Rule 57F4 is not in existence.  You may send the assest on the origin invoice of the supplier, and supplier would raise a new invoice for the purpose of such replacement.

Rule 16 of Central Excise Rule, 2002, is the relevant Rule and applicable on you supplier in this scenario.  Your supplier would have to act under Rule 16.

[Prashant soman]

Thanks a lot

 

 

AI Summary

Asset replacement under warranty: supplier must process replacement under Rule 16, return on original invoice and issue replacement invoice. Asset replacement under a vendor warranty for an asset capitalised should be processed by sending the defective asset to the supplier on the supplier's original invoice and the supplier must act under Rule 16 to effect replacement and issue a replacement invoice; Rule 57F4 is not applicable.