Notification 67/95 for captive consumption

[RAM SHARMA]

Dear Experts,Whether any capital goods mfg or fabricated by the other agency in own premises is exempted from excise duty and central excise registration under notification 67/95.Please advice.Thanks

[Rajagopalan Ranganathan]

Sir,

       I understand that your query is whether capital goods manufactured by other agency in your factory premises  is exempt under Notification No. 67/95.   

         But it can be argued that the other agency is hired labourer  then as per Section 2 (f)  of Central Excise Act, 1944-

"and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account."

Therefore if the other agency manufacture the capital goods in your account and if the capital goods so manufactured is used for further production of other dutiable excisable goods in your factory then you are eligible for the exemption.  

[RAM SHARMA]

Whether excise registration is required for captive consumtion of capital goods.Thanks

[Arun Kumar Singh]

If intermediate products are amount to manufacture and that products are used in the manufacturing of exempted final products then duty will be applicable on intermediate goods. If intermediate goods used in the final product and final product are dutiable then no need to pay excise duty on intermediate goods. 

[Rajagopalan Ranganathan]

Sir,

       If the capital goods are used for manufacture of dutiable final products, then you can avail the exemption under Notification No. 67/95.  If the other agency is merely manufacturing the capital goods on your account he need not get registered with the department for the reason that it is manufactured in a factory which is already registered.

[Mahir S]

1. The other agency can raise excise invoice for manufacture of capital goods in your factory and u can pay and avail the credit thereon. Such capital goods can be used for manufacture of both dutiable and exempted goods and question of exemption of excise duty/registration/captive consumption therefore does not arise.

2. If Dies/Tools are developed within your factory by the other agency, then you can claim exemption from excise duty under Notification No. 67/95 CE dated 16.3.95 since there is no physical removal of such dies from your factory and instead, the same are retained and used within the factory for manufacture of other excisable goods on which duty is payable. However, you have to amortise the total value of the dies over the components manufactured by you and you have to add the proportionate dies cost in each component to arrive at the Transaction value for the components cleared to your customer and pay duty on the components accordingly.

[RAM SHARMA]

Dear Experts,Factory is already registered for manufacturing of excisable goods neither capital goods. whether the factory should amend the excise registration for captively consumed capital goods.Thanks&Regards

[Rajagopalan Ranganathan]

Sir,

Since you are already registered under central Excise Act, 1944 no fresh registration is required.

[RAM SHARMA]

R/Sir,I am talking about amendment of registration for capital goods. Secondly whether we should show these capital goods in Rg-1 and ER-1 Return.Thanks

AI Summary

Exemption for captive capital goods: in factory manufacture on account can qualify for exemption without new excise registration.
An outside agency manufacturing capital goods within a registered factory on the factory-owner's account is treated as manufacture by the registered unit; such capital goods retained for use in producing dutiable final products may be exempt under Notification No. 67/95, no fresh excise registration is required, and dies/tools retained in the factory are exempt from removal treatment but their cost must be amortised into component transaction value for duty computation.