excise on intermediate

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harish (Querist)

04 December 2010 I am a manufacturer of Narrow woven fabric (CETH 5806) from Plastic granules/scrap. Narrow woven fabric is exempted under Central Excise Tariff. During the manufacture process, an intermediate product namely synthetic multi-filament yarn(CETH 5402) is obtained.We use this yarn wound on bobbin in the manufacture of narrow woven tape. We do not sell this yarn. This yarn is a complete product in itself except coning. This yarn is available in the market wound on paper cone( packing ) .Without paper cone yarn can not be sold.However this yarn has a life of few months and a complete product. Some of other units have sold this yarn in the market. If this yarn is to be sold in the market then, then a paper cone (packing) is to be used and if used captively then no paper cone is used instead a bobbin is used on needle looms to use yarn in the manufacture of narrow woven fabrc. My question is whether we will have to pay excise duty on synthetic filament yarn captive consumed without use of paper cone(packing material) captively used in the manufacture of narrow woven tape and we will have to seek excise registration. Please tell some relevant judgements/circulars. Please reply quickly as excise officers are pressing hard.
Thanks and regards ,
Harish

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

05 December 2010 Yes as captive consumption of goods also amountas to removal. If the intermediate product is liable to duty and has no exemption then only Rs.150 l;akhs basic exemtpion can be examined if the totral manufactured goods are less than 400 Lakhs. not 8/2003 as amended.

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