central excise duty liability on goods removed having no market valuue.

[NEERAJ KUMAR, RANCHI]

Dear sir,

One manufacturer clears good which are his by product but the goods has no market value and the same is cleared free of cost. But the said goods is  covered under tariff and attracts duty. In such case can central excise duty be demanded on clearance of such goods.

[rajkumar shukla]

if it is chargeable to advalorem duty , it would be nil.

 

[Mahir S]

Rule 11 of the Central Excise Rule, 2002. provides that no excisable goods shall be removed from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorised agent.

Hence Central Excise Invoice is to be issued mentioning therin the description and quantity of such goods and affixing Bold Heading on the invoice that - Goods cleared free of cost.

It is also advisable to keep a copy of letter from the Buyer stating that the said goods are not marketable and has no commercial value therefore are received free of cost. The Innoice nos, description and quantity of such goods cleared during the month  are also required to be intimated separately to the Central Excise Range office at the time of filing of Monthly Returns.

But, I am not able to understand how can any excisable goods which are covered under tariff and also attracting duty, do not have any Market Value......

[rakshit verma]

Since amendment made by Finance Act, 2008, goods includes any article,material or substance which is capable of being bought and sold  for a  consideration, and  as in your case the goods has no consideration and not marketable, it is not liable to duty.

 

 

Rakshit verma

AI Summary

Excise duty on non marketable by products: lack of consideration can remove liability, but strict invoicing and records remain required.
Non marketable by products cleared free of cost are unlikely to attract central excise if they lack consideration or marketability under the amended definition of "goods," and where ad valorem duty applies the taxable value may be nil; however, compliance requires issuing a Central Excise invoice stating "Goods cleared free of cost," obtaining a buyer's declaration of non marketability, and separately notifying invoice details and quantities to the Range office with monthly returns.