C.Ex duty on Cotton Yarn Waste

[deepak kalambate]

Dear Sir,

Please let me know whether C.Ex. duty is applicable on clerances of yarn waste as C.Ex Tarriff showing NIL rate of duty (CHHD 5205)

 

[YAGAY andSUN]

Well, some case laws which were pronounced by the Hon'ble Tribunals, are in you favour.  But, since Excise Duty is an Indirect Tax, it better to collect the tax and deposit in the Governments account as litigation cost is always on higher side than deposition of central excise duty on the nominal value of wastes and scraps.  Choice is yours.

 

AI Summary

Excise duty on yarn waste: consider collecting and depositing tax to avoid revenue exposure despite favourable tribunal rulings. Whether excise duty applies to clearances of cotton yarn waste is contested; tribunals have issued favourable rulings, but because excise is an indirect tax and litigation costs can outweigh the nominal value involved, a practical recommendation is to collect and deposit central excise on yarn waste and scraps to avoid revenue exposure.