Circular No. 120/31/95-Central Excise
Ministry of Finance, (Department of Revenue)
Central Board of Excise & Customs, New Delhi
Subject:- devising the procedure / amendment of Rule where inputs on account of being defective are returned to the supplier of inputs as the trade has represented that in such cases, invoices cannot be issued – Point No. 5 of the Principal Collector”s Conference held on 20th / 21st January, 1955 – Regarding.
I am directed to refer to the Point No. 5 of the minutes of the Principal Collector”s Conference held on the 20th / 21st January, 1995 regarding devising of the procedure / amendment of Rule where inputs on account of being defective are returned to the supplier of inputs as the trade has represented that invoices cannot be issued in such cases.
2.The Board has examined the matter. It is observed that the provisions of Rule 57F(3) are squarely applicable to a case wherein defective goods are to be returned to the supplier of the goods. Hence, the procedure prescribed under Rule 57F(3) can be followed for return of such goods by the buyer to the supplier and the movement of the goods can take place on Rule 57F(3) challans without involving credit/ debit in the RG-23A part-II account. Necessary action be taken to safeguard revenue where defective inputs are not received back by the manufacturer.
