Goods Transfer

[Asked by Guest]

hi,

is there any possible to transfer excisable goods without payment of excise duty from one unit to another unit of the same company for storage as well as sales? what r the procedures to made for this transfer?.

[Rajagopalan Ranganathan]

Sir,

There is no provision under Central Excise Act, 1944 to transfer manufactured goods from one unit of the company to another unit of the same company without payment of duty. If manufactured goods are cleared from the manufacturing unit it should suffer duty whether it is cleared to own unit or to the third party.

Thank u Mr.Rajagopalan Ranganathan, but i heard it is possible, if Asst.cmmr of Central Excise of both unit accepted, i dont know exactly..

[varun arora]

There are two ways only by which goods can be cleared without payment of duty.

1.) Rule 4(4) of Central Excise Rules, 2002 provides to permit facility to SEASONAL GOODS in case manufacturer is short of Storage Space. There are certain goods whose production is seasonal(e.g. Sugar- it is manufactured only during the season the sugarcane is produced) but which are sold throughout the year. there may be situation that space in store-room of factory is not enough to store total production.

Rule4(4) intends to facilitate storage of such goods outside the factory without payment of duty. CCE may put reasonable conditions while allowing this facility.

2.) Rule - 20, WAREHOUSING PROVISIONS.

 

thank u Mr.Varun arora, but Rule4(4) of central excise 2002, denotes, " Notwithstanding anything contained in sub-rule (1), Commissioner may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer where the goods are made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty subject to such conditions as he may specify", shall i follow this procedure?

and if Commissioner is not accepted, whats the other way to the transfer the goods?

[varun arora]

Dear Mr. Felix,

It is discretion of Officer actually.

May i know what is the reason behind the intention of clearances without payment of duty??

ya, sure Mr.Varun arora, there is no space for storage of production goods in store room (i.e.,godown) in one unit but it is available in other unit that why we want to transfer from their without payment of duty like an inter unit transfer.

[varun arora]

Sir, As i said its written in the legal text "May", Therefore its up to the discretion of officer.

But He/She should not deny for that particular reason.

[YAGAY and SUN]

Under Section 12BB (1) but it's pertain to LTUs.

[Ganeshan Kalyani]

the excise duty liability is anyhow you have to pay either at the time of removal from factory or while sale Then it is better to pay at initial stage itself. If cash flow is substantial then you must try for the option keeping department informed. A written letter should be sought from department for this option of transferring the goods to depot and paying duty as and when sale happens from depot.

AI Summary

Inter unit transfer without immediate duty is not permitted except via Commissioner permission or warehousing provisions.
There is no general entitlement to transfer excisable goods between company units without payment of duty; removals from the manufacturing unit are ordinarily dutiable. Relief is limited to discretionary permission under Rule 4(4) for seasonal goods to be stored outside the factory without duty and to warehousing provisions under Rule 20 that permit deferred duty treatment. Operational use of these options requires explicit, written departmental authorization and compliance with any conditions specified by the Commissioner.