Excise liability for two unit

This query is : Resolved

Guest

Guest (Querist)

26 December 2014 one of our client has two Plant(one established recently and their is distance of 50 km between two) both is registered under Excise.

Company (Engineering Company) has plan to start work in new factory by issue of raw material after some of the process (Such as cutting,Bending etc..) to new plant where further work has carried out(such as febrication, shot blasting,further bending, painting etc..) and after further process goods return to old plant (this new plant also may carry out job work from others).

now old plant do assembly on structure and manufacture final product (machine).

The product which transfer from new plat is not sellable in open market as it has no use except for which it manufacture.(i.e. particular machine)

Now question is how to treat this transaction in Excise.. Whether it fall under Job Work and it is possible to consider it as job work or it fall under rule 8 for Captive Consumption?

Arun Kumar Singh

Arun Kumar Singh (Expert)
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27 December 2014 The principle manufacturer unit are liable to pay excise duty and goods will be removed for jobwork under jobwork challan. No need to pay service tax if principle manufacturer pay the duty on final products. You should consult with any professional.

Guest

Guest (Querist)

27 December 2014 Dear Sir,

Thank you For Reply and Solving Querry.

Final product is Cleared under UT-1 Bond or Rebate Claim for Export.

Is this make any Diffrance for liability of Second (New Unit)?

Santosh Soni, CEST Consultant

Santosh Soni, CEST Consultant (Expert)
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29 December 2014 If one unit is sending semi-finished goods to its another sister concern unit then it has to follow Valuation Rules whereby 110% of cost of production would be computed, whether for job work or otherwise.

Regd your 2nd query, it makes no difference whether final goods from your unit-1 would be cleared on payment of duty for home consumption or for export.

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