Sale of returned goods

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2011 A munufcturing unit receives back materials from customer. The unit takes the creadit of returned material u/r 16.

Now the party has to resell the materiall to another party but the prices have gone up since the materials were returned.

Under the premises can the unit charge duty according to the present transaction value and charge duty accordingly, if so whether differential amount of duty needs to be in PLA or centvat credit in full can be availed.

PAWAN KUMAR

PAWAN KUMAR (Expert)
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07 October 2011 Duty is to be paid as per current transaction value which can be paid either from cenvat or PLA account.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2011 ThanYou Mr.Pawan Kumar. Would the position hold even if no activity has been undertaken on the returned goods and they are being sold as such to another customer.

Would appreciate if you cite some case laws also.

Thanks

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PAWAN KUMAR

PAWAN KUMAR (Expert)
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08 October 2011 It prescribed already in rule 16(2) whereas if your activity is not amount to manufacture reversal of cenvat taken would be done. In your case you will clear the returned goods without any activity on it, then, only cenvat taken would be done.

Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2011 Mr.Pawan Kumar

Thanks again. Yes thats was not clear from your first response. However onc again request you to opine in the light of CESTAT Judgement, against appeal No. e/198/2009, given by west zone mumbai bench on 24.2.2010.

Thanks

PAWAN KUMAR

PAWAN KUMAR (Expert)
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10 October 2011 Judgements can not change the basic theory of rules. You should never favor any judgment except in the proceedings during an SCN.

Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2011 Thanks.

However, in the present case the Revenue would stand to gain only. Is getting a specific permission from the department a solution?