Applicability of Excise

[HIMANSHU JARIWALA]

Copany A LTD is manufacturing Fully Drawn Yarn(FDY) from Chips and and is excisesable goods. Company B LTD is procuring Yarn from out side and do some process on it and then sale it. the product of company B LTD is non excisable. Now A Ltd. wants to take over B Ltd. The question is that is after take over product of  B LTD which is nonexcisable becomes excisable or remains as it is. Is it batter to maintain saperat books of account for both excisesable product and non excisable product as A LTD (UNIT-1) for excisable goods and A LTD (UNIT-2) for non excisable goods?

[ajay singh]

For claiming the benefit of cenvat credit the separate books of account is to be prepared for both excisable and non excisable goods

After takeover non excisable goods never becomes excisable until the product becomes excisable by the government in the official gazzete

[Ramaiah Swamy]

good evening mr. himanshu

 

1. With A Ltd., taking over B Ltd., the non-excisable goods will not become excisable goods

2.  You can seek change of name in the registration certififcate for B Ltd., after take over

3.  Excise registration is given for each premises.

4.  Therefore you can continue with the 2 sets of registration certificates after taking over also.

5.  Once the registration is seperate, it is implied that seperate books of accounts have to be maintained for two units.

6.  Issue of cenvat credit availment may arise in case there are common input services utilization after take over.

 

With best wishes,

 

Ramaiah swamy

 

AI Summary

Company A's takeover of Company B won't change non-excisable status; maintain separate accounts and registrations for benefits. Company A Ltd., which manufactures excisable Fully Drawn Yarn, is considering taking over Company B Ltd., which processes and sells non-excisable yarn. The main query is whether the non-excisable status of B Ltd.'s products will change post-takeover. Responses indicate that the non-excisable status remains unless government regulations change. It is advised to maintain separate accounts for excisable and non-excisable goods, with distinct registration certificates for each unit. This separation is necessary for cenvat credit benefits and to address potential issues with shared input services.