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Cer 2002

Mohit (Student) (44 Points)

18 February 2016

R-16A sold goods To B [ 1,00,000 10000(ED) ] on 10th April . On 6th may A Paid ED to govt. , B returned goods on 12th may , A accepted goods as THEY WERE IN PERFECT CONDITION to be sold to some other party at same price , and gave only ₹1,00,000 to B ,stating I won't give ED back to you . Now As per Rule 16 Will A still have the right to book the credits in his books , and B liable to remove the credits from his books.? Although it will be UNJUST

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3 Replies

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 18 February 2016

A can Reavail CENVAT Credit of duty paid on Inputs which was availed previously for this returned sale and file refund claim from the department and refund the excise amount to B. Otherwise B can issue debit note to "A" for excise duty amount not refunded and "A" can utilise such unrefunded amount from excise department against sale of such same goods to some other party

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Mohit (Student) (44 Points)
Replied 25 February 2016

Thankyou so much Nuli Swami Ayyappa.!! Thanks a lot . Can you please tell me:- Isn't Mr A in a benefitial position . As he didn't refund any ED to Mr B , and he also got his cenvat credit back (which he utilised at the time of payment of ED to dept. in May) & now when he will sale those goods to some other party & he will collect ED from the new buyer of goods .

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 25 February 2016

In the given case, When claim for refund of E.D made it is the responsibility of Seller to refund it otherwise seller can not re-avail E.D paid on Inputs used for such sale