captive consumption

[Asked by Guest]

we manufacture machinery which is used in jute industries.our product is exempted.we consumed some items in a factory as a raw material for making another goods.we have already transferred goods from finished goods to captive consumption and shown in the RG1 register as captive consumption.

Is there is any way to reverse the captive consumption to finished goods???

[PAWAN KUMAR]

As per my view, no such option is available in the excise law. Once goods consumed as captive, you can not return the consumed goods into its original shape and size.

[YAGAY and SUN]

Dear Ranjit,

You may reverse the entry from captive consumption to finished goods provided you have physical stock of such goods. Further, if you made this entry by mistake, even then, you may reverse the entry in DSA but after intimating the Jurisdictional Central Excise Officials in this regard.

In this matter, Central Excise Department may visit your factory premises to check the authenticity of this transaction. So be cautious in this regard.

If this is a bonafide mistake then you may reverse, otherwise not.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[PAWAN KUMAR]

Dear Sir,

Please share the rules/notification/circular which specify that goods once captive consumed and excise duty exemption already claimed on the same, can be reversed into DSA register.

[YAGAY and SUN]

Dear Pawan,

Please check our reply meticulously. We have provided some candid points under which solutions of unsolved or of typical issues in indirect tax matters can be explored. There are two type of laws,namely:-

1. Written Laws (Acts, Rules, Notifications, Circulars and Clarifications etc.)
2. Unwritten Laws (Explanations, Interpretations, Understanding of subject matter, creativity, discussions, applying the mind and arguments).

Our reply falls under the second category i.e. "unwritten laws". Written laws are rigid but unwritten laws develop the written laws. Government made law but courts/advocates/Consultants interpret the laws and this way justice is done.

In this reply, we have provided our perspective towards above mentioned query.

Thanks for being curious.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

Physically we moved the captive stock to finished goods. i want to know that what will be the treatment in RG-1 register

AI Summary

Captive consumption reversal: may be corrected in records if physical stock exists, subject to official intimation and inspection.
Reversal of captive consumption entries may not be statutorily provided for, but practitioners advise that if physical finished-goods stock exists or the entry was a bona fide mistake, the entry can be reversed in DSA/RG-1 after intimating jurisdictional central excise officials, subject to possible departmental inspection and verification.