Excise prodcedure

[Yatin Bhopi]

We the manufacturer and having two factories ABC & XYZ. Finished Product ‘A’ can be manufactured in both the factories. Ideally it is produced in factory “ABC” but due to limitation in production capacity in factory ABC we intend to manufacture product “A” in factory “XYZ”. This finished product will then be sold to ultimate customer from factory ABC. Please let me know is this in line with excise law?

Need your advice urgently

 

[Rajagopalan Ranganathan]

Sir,

    Why the product 'A' manufactured at factory XYZ is being sent to factory ABC for being sold to ultimate customer? Why cannot the product be sold directly from factory XYZ  to the ultimate customer?

      According to Central Excise Law, when you remove the product from XYZ to ABC you have to discharge the duty payable on the product   

AI Summary

Excise duty: transfers of manufactured goods between factories require payment of duty when removed for sale.
Where identical finished product manufactured at factory XYZ is removed to factory ABC for onward sale, the transfer constitutes a removal attracting duty payable, and the manufacturer must discharge the excise duty on goods removed from XYZ to ABC unless a specific exemption or procedure applies.