Excise Duty Applicable

[Rahul nathan]

Hello

We have registered for manufacture under central excise Act, we were procuring for cables & Transformer from our various suppliers, for the same material will be sales to our customers without any modification on cables & Transformers. In that case that material is applicable for Excise duty.

Pls advise to me.

[Mahir S]

U have not mentioned whether u r also registered under central excise act for manufacturing of cables and transformers or these are bought out items for further sale. Please clarify

[PAWAN KUMAR]

Please clarify whether you are in trading business of identical goods.

[Rahul nathan]

we have registered under "manufacture".

[Mahir S]

My clarification was (i)  whether you are registered for manufacture of cables and transformers or for any other goods and (ii) whether you have availed cenvat credit for procurement of cables and transformers or whether they are bought out items.

Please clarify.

[YASHAVANTH RM]

Dear Rahul,

You have registered as manufacturer under C.Ex. Act. if you are availing credit of cables,

Reverse it at the time of sales to other party.

If it is same price no extra duty payable.

If price variation pay the difference duty.

If the cables are part of Transformers supply, pay duty only on such commodity.

[Arup Das]

Dear Mr Rahul

On your primary question whether excise duty is applicable or not, the Answer is "No"- Since you are not manufacturing the cables/transformers you are not supposed to charge excise duty.

Excise duty is charged only when you manufacture. In the present case you are not manufacturing so no question of excise duty applicability. Even if there is value addition you are not supposed to charge excise duty.

On Credit availability:- Since you are not using it for manufacture you are not supposed to avail the credit.

Additional information :- Suppose you are also manufacturing an excisable product and cable and transformers are accessories of the excisable product, and at the time of sale you are invoicing as a single product then you need to charge excise duty even on cables/transformers and also on the input side you are eligible to take the input credit.

Kindly Note :- If you are doing a trading from your manufacturing premises and your trading product is identical to manufacturing product then you need to bifurcate your premises between manufacturing and trading premises. Permission will be given by your range office.

Regards

Arupp Das

[PAWAN KUMAR]

Dear Rahul Ji,

As per the scenario, it is clear that you are in trading of identical goods which you also manufacture in your registered premises. In such case of trading of identical goods, permission is required from the jurisdictional commissioner of central excise not from the range office. Please refer Instruction No.02/2001 dated 12.11.2001 of Pune-II Commissionerate.

AI Summary

Excise duty applicability for traded bought-out components requires CENVAT credit reversal and composite supply duty treatment. If bought-out cables and transformers are merely resold and not manufactured by the registered manufacturer, excise duty does not apply to those sales; however, if CENVAT credit was availed on those inputs it must be reversed on sale. If such items are supplied as part of a composite excisable product invoiced together, duty applies to the composite supply and input credit follows their use in manufacture. Trading identical goods from manufacturing premises requires segregation of activities and permission from the commissioner.