Excise registration

[abhay pandey]

Please advise when a company should take excise registration.

From start of

1. Manufacuting of building

or

2. After completion of Building and Start of purchaing of Machinery (Capital goods)

or

3. At time of start of production

Please advise that if company has taken registration at time of start of production they can take cenvat credit on capital goods or not which purchased before taking excise registration.

[YAGAY andSUN]

Dear Abhay,

Registration Certification can be obtained after completion of Construction of Factory Premises as layout plant is required to be submitted with the application for seeking registration. Please check Rule 9 of the Central Excise Rules, 2002 as amended from time to time read with Notification No. 35/2002-CE(NT) dated 26-06-2001 read with CBEand C Circular No. 662/53/2002-CX dated 17-09-2002.

Further, as per CBEandC Circular No. 88/88/94 dated 26-12-1994, during initial set up of factory, machinery is received but factory has not yet come into existence as production has yet to commence. The credit will be available when factory is registered and production starts.

This is for your kind information.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Ganeshan Kalyani]

Hi,

Refer section 8 of The Central Excise Act, 1944 and Rule 9 of Central Excise Rules, 2002 regarding obtaining registration

Section 174 of Central Excise Rule, 1944 Registration of certain persons.- (1) Every person , including a person liable to pay the duty of excise under rule 7AA, who cures, produces, manufactures, carries on trade, deals as a broker or commission agent, holds private store-room or warehouse or otherwise uses excisable goods, or a person who issues invoice or invoices under rule 57AE, shall get registered and shall not engage in the curing, production, manufacture, trade, dealing as broker or commission agent, storing in private store room or warehouse or use excisable goods without having applied for such registration to the jurisdictional range officer or such officer in such forms as may be specified by the Board.

regards,

ganesh

[Mahir S]

Yes agreed but it would be advisable to get registration after completion of Building and before Start of purchasing of Machinery (Capital goods).

In this way, you can avail Cenvat Credit for goods brought into the Plant as the Invoice Received shall contain the registration number, address of the concerned Central Excise division, name of the consignee, description, classification, time and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value, of goods and the duty payable thereon.as per Central Excise Rules 2002 and also as per Cenvat Credit Rules, 2004.

Also, please also go through the definition of Capital goods under Cenvat Credit Rules, 2004 as any goods used for construction of a building or a civil structure or a part thereof are excluded from the definition of capital goods and hence not eligible for Cenvat Credit.

[Arun Kumar Singh]

Every assessee should avail SSI exemption and if turnover reached 1.5cr then take registration and after this limit you should pay duty.

[YAGAY andSUN]

Dear Arun,

What if assessee does not fall under the criterion or eligibility or definition of SSI units? For availing the benefits of SSI Units, a unit must be registered as SSI unit on the criterion of its investment.

Therefore in our opinion, every assessee can't avail SSI exemption. Please review your reply.

Regards

YAGAY and SUN (Management and Indirect Tax Consultants)

[abhay pandey]

As per Circular no. 88/88/94-CX dated 26/12/94

Please check below point and clarify, as per below cenvat credit on capital good not allowed before start of production:

The issue has been examined. It is observed that credit of the duty paid on capital goods is admissible only when such capital goods enter into production, therefore, it will not be appropriate to allow the credit at the stage of initial setting up of a factory (where the factory is not yet is existence). The manufacturer intending to take credit of he duty paid on capital goods in such a case shall continue to file a declaration as required under Rule 57Q, irrespective of the fact that such a factory has not come into existence and/ or got registered. The credit on the capital goods received at the time of establishment of such a factory can be availed only after the factory commences production and is registered. The credit so availed can be allowed to be utilised only for payment of duty on goods manufactured and cleared by such a factory.

[YAGAY andSUN]

Dear Adhay,

I am afraid that Rule 57Q you are referring in your reply, is no more into existence, though the reply is valid.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Cenvat credit availability depends on excise registration and commencement of production before claiming credit on capital goods. Excise registration should be obtained after factory construction because a plant layout is required; registration must precede engaging in manufacture or use of excisable goods. Cenvat credit on capital goods received during initial set up is admissible only after the factory is registered and production has commenced; goods used for construction are excluded from the capital goods definition and not eligible for credit. SSI exemption applies only to units meeting statutory registration and eligibility criteria.