CENVAT credit

This query is : Resolved

CA Ysil Karunai (Querist)
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15 December 2009 Dear Sir,
When goods are removed from a factory for a sale say Rs. 10000 duty paid.
Subsequently say within 3 months the goods are return back to factory from a buyer for some reasons.
Query:
1. whether CENVAT credit taken by a buyer should be reversed?
2. if yes, whether fully and at what time?
3. Suppose, duty collected by a seller was paid to Govt. in case buyer ask for refund for the whole amount including duty paid for returned goods, what is the treatment for in case of seller and buyer?

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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15 December 2009 When the buyer returns the goods he could send the same under Rule 4 (5(a) under job work. In that case only delivery documents would move. If rejected and not taken to stock at all, the credit availed is to be reversed by the buyer.
The seller/ manufacturer would avail the credit under Rule 16 and on removal rverse the same again.