Trading in Manufacturing Unit

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This query is : Resolved

Rahul Dayma (Querist)

07 October 2010
Hello Sir/Mam,
I had a small query. There is a manufacturing unit which purchases colour coated coils from various companies and then by processing them in a roll forming machines converts the coil in colour coated sheet and sells them after paying the required excise duty. Now the company also sells colour coated coils to other companies who have such similar machine or may require the coil for some other purpose. Now my question is does the company have to levy excise duty on the profit made on such trading of coil, even though no manufacturing is being done by it. Or is it ok for the company to sell the coil without levying excise duty on the profit and just passing on the excise duty that was actually received on the purchase of such coil i.e. in a way similar to what a First stage dealer does. Thank you for your advice in advance.
Regards,
Rahul Dayma

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

08 October 2010 Please check under the chapter notes of the Central excise tariff that the activity does not amount to manufacture.
If not only the duty paid earlier should be passed on and the CED on the transaction value if charged would be incorrect.

Durga prasad Ambati

Durga prasad Ambati (Expert)

02 May 2011 "Now the company also sells colour coated coils to other companies who have such similar machine or may require the coil for some other purpose"

with reference to the above you Cleared the goods "REMOVED AS SUCH". In this manner you have removed your raw material by reverse the excise duty same as received from your supplier. so, you need not pay any extra duty on them. you have raise separate Invioce for this (not inculdes finished goods invioce) and mention in that invioce "REMOVED AS SUCH" Clearly and charge your commercial value with profit and reverse the excise duty same as received from your supplier and remove the goods [raw material (colour coted coils)].

In the first stage Dealer concept (IF YOU ARE REGISTERED DEALER) you have raise Dealer invioce and pass on the Excise duty to your customer and maintain the 23D REGISTER FOR THIS REGARD. thank you

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