22 March 2010
I am working in a Automotive Company. Our Customer has rejected some items out of which we have supplied to them by raising a Invoice and paying Excise duty for the rejected items.Then we can rework some items and supplied to them/ If we cannot rework the items then transfered to Scrap location subsequently sale the items by raising a Invoice and pay the excise duty for that portion also.
But Excise dept demanded that we have to reverse the excess of excise duty whcih we availed by Customers rejection Invoice and paying through Scrap Sales.
Example : We supplied the items to Customer @100/- and excise duty is 10/-. if the customer rejected the items the customer has raised the invoice for 100/- and the excise duty is 10/-. We have availed the excise credit of Rs.10/- Then we raise the Scrap Invoice for Rs.20/- and pay the excise dutu of 2/-.
Whether we have to reverse the excise credit of (10-2)= 8/-
14 April 2010
You have to reverse the credit taken on the inputs used in the finished goods along with interest.
Please follow the below example:-
Inputs value – 1000/- Excise Duty – 10%
You have taken Rs.100/- credit on the inputs used in the finished goods. If your finished goods value is Rs.1500/- (Inputs – 1000/- + other expenses – Rs.300/- + profit – Rs.200/-)
Now your finished goods transferred to Scrap then its value is Rs.200/- and you pay Rs.20/- excise duty.
So you are taking Rs.100/- credit on your inputs and paid Rs.20/-. The difference is loss to the excise dept. So you have to pay the difference along with interest.