Captive consumption

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Harsha (Querist)
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06 March 2015 Dear Experts,

Company "X" has its registered Unit of manufacture in location "Y",
Company X manufactures a dutiable product,
Company X not only sells the product to its customers but also transfers some of its Finished Products to its another manufacturing unit which uses it as Raw material for manufacture of another Dutiable product. The other unit is located 10kms away from Location "Y".

Will this movement of material from Location Y to other unit, leads to Captive Consumption.
(Both units are seperated)

Thanks in Advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 March 2015 It will not be captive consumption.

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all excisable goods manufactured in a factory and used within the factory of production (hereinafter referred to as “inputs”) for the manufacture of final products, cleared in accordance with the provisions contained in any of the notifications
mentioned in the Schedule to this notification, from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)

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Harsha

Harsha (Querist)
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06 March 2015 Thank you for the reply

Adding on to the question..

Should the company raise an invoice at the time of transfer of material from Location Y to other unit, with Excise component in it??

Sreekumar

Sreekumar (Expert)
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06 March 2015 Materials can be moved under excise invoice on payment of duty. Valuation shall be as per rule 8 of C.E.Valuation (determination of price of excisable goods)Rules 2000 and such values shall be certified by a cost/chartered accountant.

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