WE ARE ENGAGED IN GALVANIZATION OF M.S. ANGLES, M.S.FLATES AND PLATES. WE ARE GETTING M.S.ANGLES AND M.S.FLATES FREE OF COST FROM SUPPLIER ON DELIVERY CHALLAN AND WE CARRIED OUT HOT DIP GALVANIZATION. WE ARE MAKING INVOICE FOR THE SALES OF ZINC ONLY AND CHARGING EXCISE ON THE VALUE OF SALES OF ZINC AND ALSO AVAILING THE CREDIT OF ZINC PURCHASED BY US. MOST OF THE PARTIES ARE EXCISABLE AND REST ARE SSI UNITS HAVING TURNOVER OF LESS THAN 150 LACS. HOWEVER DEPARTMENT CLAIMING THAT VALUATION SHOULD BE AS PER RULES 10A AND ASSESSABLE VALUE SHALL BE THE GOODS AT WHICH GOODS REMOVED BY THE RAW MATERIAL SUPPLIER.
SO WHAT SHALL BE THE VALUE ON WHICH WE HAVE TO COLLECT EXCISE DUTY...????
Company Must Pay Excise Duty on Full Value of Galvanized Goods, Including Supplier's Materials Under Rule 10A A company engaged in galvanizing M.S. angles and plates receives materials free from suppliers and charges excise duty only on the zinc used. The Department argues that valuation should follow Rule 10A, considering the supplier's value. Experts in the forum agree with the Department, stating the company incorrectly undervalued the goods and failed to follow proper job-work procedures. They emphasize that galvanization amounts to manufacturing, requiring excise duty on the full transaction value, including the cost of raw materials and manufacturing. Various legal precedents and circulars are cited to support the correct valuation and duty payment practices. (AI Summary)
TaxTMI 
TaxTMI 
