How we will debit the Excise duty if we write off.

[Guest]

Dear Sir,

We have some stocks which we are showing in RG-1 as a closing stock from last 2 years when we doing analysis we found that these items are get absolute so these items are not going to sale in future. management decide for doing scrap these items. further some items are which are we can use these materials in our internal for making some other material.

Query

1) Some items are going to scrap in this case how we will remove the stock's from RG-1 and paid the Excise duty.

2) If some items are already declared in RG-1 and showing closing stock these items are not sale in future but we can use the same items for making some another F.G items so in this case how can we accounting these stocks in RG-1 and how we will discharge the Excise duty liability also.

Regards

Swapneswar

[YAGAY andSUN]

Please check CBE&C Circular No 907/27/2009-CX/07-09-2009 and CBE&C Circular No. 990/14/2014-CX-8/19-11-2014 read with remission of duty Rule 21 of the Rules , 2002 (if goods are unfit by consumption for marketing) in this regard.

[KASTURI SETHI]

Sh.Swapneswar muduli Ji,

I endorse the reply of M/S. YAGAY AND SUN, Sirs. I intend to add something. Scrap is also a final product. If it is further used captively in the manufacture of dutiable final product, there is no problem. In case, scrap is used captively in the manufacture of exempted final product, you will have to pay duty on the scrap so used.

[Suryanarayana Sathineni]

Dear Swapneswar Ji,

As already stated, in the given situation, an assessee having the below options:

1. To apply for remission under Rule 21 of CCR,2002 and have to reverse the proportionate credit taken on the inputs

contained in the remitted products at the time of destruction after getting the permission.

2. Some assessees, prefer paying duty instead of waiting for the remission permission which generally takes longer periods and cannot wait till the permission received due various technical reasons like space constraint or other

regulations relevant for the specific industry.

However, while opting for the 2nd one, one has to evaluate the difference between the duty amount and the proportionate credit and if the difference is marginal, it is advisable to pay duty and clear the material for destruction instead of waiting for a longer period for getting the remission permission under Rule 21

Best regards

Suryanarayana

AI Summary

Excise duty on scrapped stock: remission with credit reversal or pay duty instead to clear materials quickly. Excise duty arises on obsolete or scrapped closing stock; an assessee may apply for remission under Rule 21 with reversal of proportionate input credit upon permission, or opt to pay duty instead of awaiting remission. Captive use of scrap in manufacture of a dutiable final product does not attract additional duty, but use in manufacture of an exempt final product requires duty on the scrap used. The choice depends on the relative cost of duty versus reversed credit and operational considerations.