Transfer of Funds From Excisable firm to Non excisable firm

[mantra bishnoi]

We have a manufacturing partnership firm A (covered under excise) and firm B manufacturing same goods in a nearby location with almost same partners but not covered under excise.

I have in the past withdrawn cash from Bank Account of Firm A and deposited to firm B's bank account and used the same in purchase of goods for firm B. This was done a couple of years back in financial year 2014-15.

I was recently told by someone that this action can make my firm B liable to be under Excise Duty and pay excise on goods sold since the transfer was done. Is that so ?

Please respond asap.

Thanks

Mantra B

AI Summary

Transfer of funds between firms with shared partners doesn't subject non-excisable Firm B to excise duty. A query was raised regarding the transfer of funds from a firm subject to excise duty (Firm A) to a non-excisable firm (Firm B), both having almost the same partners. The transfer involved withdrawing cash from Firm A's bank account to deposit into Firm B's account for purchasing goods in the financial year 2014-15. Concern was expressed that this might subject Firm B to excise duty. The response clarified that such a transfer does not make Firm B liable for excise duty, as duty cannot be imposed without a valid basis.