22 December 2010
if the duty paid goods are removed from factory and comes back with in the same factory and thereafter they are selling as scrap and duty has been paid on that scrap proceeds, the cenvat credit benefit still can be available?
When you cleared goods from factory for job work or other purpose, at first you have to pay duty by debiting your CENVAT balance. Whenever the goods comes again into the factory within stipulated times (i.e. within 180 days) you can again take credit and effect into your CENVAT Receivable A/c.
But in your case, if goods are returned back as a scrap, you cannot take credit on those scrap quantity as CENVAT credit taken on scrap is not allowable because it is a saleable item and it has no end use.
Again, if you want to sell those scrap quantity you have to pay duty by debiting your CENVAT A/c. at prevailing rate exists for scrap. No adjustment against your earlier duty paid on those quanity from which scrap arises, which you send for job work / other purpose will be available.
Hope you can find your answer, in case any query please contact over phone: 098042-92254
Bivas Nag B.Com, PGDBA(Finance),EMBA (Finance) Dip. Central Excise & Customs
CAclubindia
