Rejected goods sale procedure

This query is : Open

ESHWAR (Querist)
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26 July 2014 Dear Experts,

This is regarding rejected goods, as we have sold goods by discharging Excise Duty and after some time we have received some rejected qty which are non re-made nor re-conditioning absolutely unusable condition. On receipt of rejected material we are not claiming CENVAT but maintaining a separate register for this lot. Now my queries are:

1). After due examination of these rejected goods can it be re-used this scrap material as inputs to make other final product. If yes? shall we have to reverse the credit of such qty of inputs which we are using to make other product?

2). After due examination of these rejected goods can we sell these as rejected unusable goods at nominal rate without excise duty. Bcoz we are not claiming any cenvat credit while entering in our premises.

3). After selling these goods will mention the invoice nos in our separate stock register.

Need advice on the above isses asap

Arun Kumar Singh

Arun Kumar Singh (Expert)
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27 July 2014 Rejected goods reused then no need to reverse the cenvat credit. If sale of scrap then duty will be payable on scrap.

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ESHWAR

ESHWAR (Querist)
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28 July 2014 Dear Sir,

Thanks for the prompt reply.

Point 1 is resolved.

Point 2 could you please elaborate it sir.
like sale procedure with/without duty and its accounting.

I still have a doubt that while accepting the rejected goods in to the premises we are not taking cenvat credit on that, but while disposing it after due examination can we supposed to pay the duty on nominal sale price.

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