ABDUL RAHEEM (CA FINAL) (47 Points)
16 July 2016Dear all,
I have a query.
In our company we have an issue , out stores department is sending out finished goods to vendors on challan basis without invoicing them in case if any product sent out earlier is found not working due to manufacturing defect. I have raised a objection to it that it cannot be done.
What is the problem ( statutory and accounts point of view ) in sending finished goods with challan ? I knew its a statutory loophole.
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 16 July 2016
Do you meaning sending warranty replacements to customers? If yes, warranty replacements can be made using delivery challan provided replacements are made free of cost.
satya
(Executive Excise)
(1839 Points)
Replied 16 July 2016
Your query not clear, as per my understanding Stores dealing purchased products not finished goods, and found any defect after avaling Cenvat Credit , unit has to Reverse proportionate Cenvat under Rule11 Inv should move defective goods to Vendor. before availing Cenvat credit stores may send goods along with orginal vendor invoice.
CAclubindia
