Taxable event
This query is : Resolved
25 February 2019
Dear Experts,
Co.,X manufacture molds for Plastic Packaging goods, on behalf of customers , it receive advance and complete the manufacturing activity and finally receive the full payment on dispatch of such machine molds.
Similarly their are two machines are under work in process stage this process started in Excise regime but still not completed the Finished goods phase, thus Co., X didn't charge any excise duty based on the Concept of excise duty charged on removal of the goods.
The ownership of the machines lies with the customer but not company .X. Mean while issued invoices for the rest of the amount spent on the expenses of machinery along with CST (central Sales tax ) @ 5.5%.
Now the Central excise auditors are issued enquiry notice to Pay the Central Excise @12.5% , by mentioning it is deemed to be sold if the invoice is raised along with CST.
Please give your valuable expertise thoughts to resolve this enquiry.
regards,
Bhavya.P
Co.,X manufacture molds for Plastic Packaging goods, on behalf of customers , it receive advance and complete the manufacturing activity and finally receive the full payment on dispatch of such machine molds.
Similarly their are two machines are under work in process stage this process started in Excise regime but still not completed the Finished goods phase, thus Co., X didn't charge any excise duty based on the Concept of excise duty charged on removal of the goods.
The ownership of the machines lies with the customer but not company .X. Mean while issued invoices for the rest of the amount spent on the expenses of machinery along with CST (central Sales tax ) @ 5.5%.
Now the Central excise auditors are issued enquiry notice to Pay the Central Excise @12.5% , by mentioning it is deemed to be sold if the invoice is raised along with CST.
Please give your valuable expertise thoughts to resolve this enquiry.
regards,
Bhavya.P
02 January 2020
There is no concept of deemed sale in Excise duty. Further, liability to pay excise duty does not depend upon sale. It arises when the manufactured goods are taken out of factory, i.e. removal of goods. The stand taken by you is perfectly correct.
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