Reprocess packing material used in exmpted goods ie. 2%

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Querist : Anonymous

Querist : Anonymous (Querist)

31 August 2012 we are the manufactured of A & B product.in Product A we have not taken any credit of RM & PM material and paid duty @ 2%. But in case of product B we have taken the cenvat credit on RM & PM material and paid duty @ 6% . my question is that the if we reprocess the scrap of product B and same is used in product A then what is the procedure of Excise duty paid or not? Please help us.

U S Sharma

U S Sharma (Expert)
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31 August 2012 better to clear the scrap to any 3rd party after paying duty, then again take invoice from that party as fresh input.

reprocessing of scrap will add headache at excise audit time. as per excise,

scrap is the bye product which is not meant to be used in factory of production in any stage,

so if you reprocess, then the whole process of generation of scrap would get doubt ful to excise team they will claim that such scrap was never generated and its done to avoid the duty.

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