50% Cenvat on rejection -capital goods-India localisation

pashya1972

Hi,


As per cenvat rule in case of material received and rejected then the procedure is as follows:

At the time of receipt of material :
50% cenvat is available in current year and RG records get updted i.e. RG23 C
50% cenvat is deferred and c/f to next year

Here NAV does the same thing and have no issue.

Now in case of the same material if gets rejected fully.

The entire cenvat amount is debited in RG register which is also correct.
But the balance 50% which is deferred for next year shd be available immediately in the current year since it is rejected but I found the balance 50% cenvat is gets deferred and can't be used in the current year.

Can anybody throw some light on this?

In my opinion the balance 50% material shd be available immediately since the material is rejected.

ssingla

pashya1972 wrote:

In my opinion the balance 50% material shd be available immediately since the material is rejected.

Better have legal opinon which I think will matter the most in this case.
System is doing correctly.