TaxTMI 
TaxTMI 
Sales/Customer return material Scrap
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....ales/Customer return material Scrap<br> Query (Issue) Started By: - SNEHAL SHAH Dated:- 25-9-2014 Last Reply Date:- 26-9-2014 Central Excise<br>Got 4 Replies<br>Central Excise<br>R/sir, We are manufacturing of Chemical . We have sold the material to our party but due to technical problem this material was not accepted by party and reject . We have received this material u/r 16 (1)(2) and take cen....
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....vat credit on party invoice copy . Now as per our chemical expert this material not able to resent to party and we want to send fresh material to party ( as a replacement ) and pay the Excise duty . Our old rejected material will be either scrap or dispose off . What implication in excise , please suggest us . Thanks and Regards, SNEHAL SHAH Reply By Naveed S: The Reply: You can send the re....
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....placement material as per normal sale under invoice and payment of excise duty. As returnable goods are to be disposed off/scrapped, therefore you shall have to reverse the credit availed on the rejected goods. Reply By Pradeep Khatri: The Reply: Dear Snehal, If goods which were returned to you if are not able to be manufactured or are not able to resend again to the customer, then, you are un....
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....der obligation to reverse the CENVAT credit on such goods. There would not be any replacement of such goods but a fresh sales would be counted, if you sell goods in lieu of rejected goods to cater the needs of your customer. Regards YAGAY and SUN Reply By Rajagopalan Ranganathan: The Reply: Sir, It is held in CCE vs. RFH Metal Castings 2005 (184) ELT 194 (CESTAT) = 2005 (2) TMI 235 - CESTAT,....
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.... NEW DELHI that - "assessee processed the returned goods but they got rejected in processing. these were cleared as scrap and duty was paid on scrap value. It was rightly held that though scrap is different from the goods, it does not mean that assessee has manufactured scrap.No one undertake a process to produce scrap. Hence amount equal to Cenvat credit availed should be paid even if proc....
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....essed goods are removed as scrap." The above decision was followed in Menon Piston rings v. CCE- 2007 (211) ELT 394 (CESTAT).= 2007 (2) TMI 22 - CESTAT,MUMBAI In view of the above decisions, you have reverse the credit taken under rule 16 (1)(2) of Central Excise Rules, 2002 while clearing the scrapped material. Reply By SNEHAL SHAH: The Reply: All of you thanks a lot for timely and valu....
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....able reply . SNEHAL SHAH<br> Discussion Forum - Knowledge Sharing ....