Hi,
If it is damaged by labour before consumption then you can not show it's rejection in production cycle.
In this case, you simply need to replace it from materials department and later on materials department will show it as a scrap by doing the scrap entry for the material in MB1A transaction wherein issuing it to the scrap account GL.
You can ask the same to FI people in your organization that how to send the material to scrap account GL.
Regards,
Narresh