Applicability of excise duty on drums

[chaganti srinivas]

Dear Sirs, Do we need to pay Excise duty on the Drums, which we received with our inputs, while clearing them as scrap.

[Ram Avtar Singh]

You have Purchase Excisable Materials in drums. at the time of purchase its value added in assessable value and calculated Excise duty libility and you have taken Cenvat credit. so when you clearing/sale this material as scrap you should charge All part of Duty and Tax.

[YP SOOD]

Not correct. It has been judicially held that Excise duty is on manumactutred goods. Since 'Drums' cleared as scrap is not manufactured product of ur factotry, no need to pay ecise duty.

[Surender Gupta]

I agree with the view of Mr. Yash Sood, you are not required to pay any duty of excise on clearnce of packing materials - pakcing material like empty drums in your case neither input nor manufactured product hence not liable to any duty

[YP SOOD]

Thanks Surinder Guptaji to agree with me.

AI Summary

Excise duty on manufactured goods may not apply to empty drums cleared as scrap, affecting liability and Cenvat.
Applicability of excise duty on drums received with inputs hinges on classification: one view requires charging duty on clearance as scrap where duty was earlier included in assessable value and Cenvat taken; the contrary view holds that excise applies only to manufactured goods and that empty packing drums cleared as scrap are not liable to excise, affecting assessable value treatment and Cenvat adjustment.