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?

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.