Question70: The audit party asks my client = manufacturer of machine and received rejected machine under invoice after 2 years -to reverse the cenvat credit on the ground of more than 6months/12 months (one year) old issue. - not eligible. the audit party is not willing to give in writing for denying cenvat credit.


Answer There is some communication gap. The rejected machine is received by your client from his customer after two years It means the customer of your client had taken credit of the machine at the time of purchase and returned it after reversal of credit

If this the case then credit is available but if the machined is returned by the customer and the customer is not registered therefore had not taken credit and the machine is returned to your client under original invoice of your client or not under duty paying document then time limit of one year will apply (Reply dt. 12/3/2018)