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

Non-excisable goods remain non-excisable after takeover; maintain separate excise registrations and books; cenvat issues may arise.
Non-excisable goods do not become excisable by virtue of a corporate takeover; excisability depends on government notification. Excise registration is premises-specific and may be renamed after takeover; maintaining separate registrations and separate books of account for excisable and non-excisable units is appropriate. Cenvat credit issues can arise if inputs or input services are commonly used post-takeover and must be addressed for eligibility and apportionment.