We are having two types of FG stocks. 1. Non cleared FG. 2. Initially Cleared FG bought to the factory due to some specific reasons. In the second point, these are the goods on which duty had been paid at the time of removal thereof are bought to factory for being repaired or due to Quality Complaints or non acceptance by the Customer. We had taken the CENVAT credit of the duty paid for such receipt and had utilized this credit for payments. Now we have a huge inventory of such receipts due to the following reasons; i) Certain receipts are not repairable. ii) Remaining receipts are repairable but no demand from Customer. The first point is related to obsolete or nonmoving items. In these two cases, kindly advise us about the mechanism/procedures to be adopted to dispose these stocks. Any permission to be obtained from Central Excise for the disposal? Destruction of goods procedures is applicable for both cases? Is it allowed to clear under Scrap category? We are

You have rightly availed the credit under Rule 16 of CE Rules 2002 for the duty paid on the returned goods. Now the goods returned should be cleared under Rule 16(2) of CE Rules. If the goods are repairable or marketable it can be removed on payment of duty at the rate applicable on the date of removal on the value determined under sec 4 of CEA. If the goods are not fit for consumption or marketing you can apply for remission of duty under Rule 21 of CEA to the Supdt/AC/JC/Commr depend on the duty involved Rs.2000, Rs.1 lakh, Rs.5 lakhs or without limit.