Treatment of wastage

[Guest]

wastage in manufacturing process of gutkha

[Surender Gupta]

Manufacturing of gutkha is excisable and therefore, if any wastage is generated from the manufacturing of gutkha, such wastage shall also be excisable, subject to other provisions of the Central Excise.

[Guest]

I'm not agreed because wastage is not generated wholly or partly in the form of finished product. Wastage incurred in processing of raw materials to make them ready for preparation of gutkha. Wastage incurres at the stages like grinding, sieving, baking, melting and mixing etc. and type of wastage is like dust (unusable raw material), weight loss (moisture), evaporation and spreading over the floor while mixing. What will be the treatment of this type of wastage and are there any standars or guidlines for wastage / shortage as per law in the field of gutkha industry.

[Surender Gupta]

You can see your query. You have not asked for any reply on wight loss due to moisture, evaporation, dust etc. From the word wastage, normally, we mean that a residual that is arisen in the course of manufacturing activity. Indeed, there can not be any excise duty on loss of goods due to moisture, evaporation, dust etc. Any wastage shall be liable to excise duty if marketable. Currently no norm has been fixed for wastage.

[Madhukar N Hiregange]

If the product is not marketable then it is not goods and therefore there would be no liability. However if marketable then the liability could arise.

AI Summary

Wastage liability: marketable manufacturing residues attract excise duty, while non marketable moisture or dust losses do not. Marketable residues from gutkha manufacturing are subject to excise duty; non marketable losses such as dust, moisture loss, evaporation or spread during processing are not treated as goods and do not attract excise. No formal norms for permissible wastage have been fixed, making marketability the determining factor for liability.