Captive consumption

If final product is exported then no duty will be payable on captive consumption. 

Thanx Mr. Arun for the reply. Can u pls. tell me the extract of Law where the same is written.?

If goods are captively consumed then the same is entitled for exemption under Excise duty ,the notification nos. are 67\95 dated 16.3.95,83\92 dated16.9.92 and10\96 dated 23. 7.96.Apart from it if your product is non excisable you are even otherwise not liable for payment of Excise duty.

Value of captive consumption goods shall be according to the Rule- 8 of Central Excise. i.e Cost of Production  + % of Cost of production it can be said % of Cost of Production.

Further if 

1.  Final Pruduct is non excisable then CENVAT credit is not available on such goods.

2. If the Final product is exportable then the duty payable as per the RULE- 18 and 19 .

Fully agreewith 

Mr. Prabhat Kumar

Good sir for this link.

Dear Sir

Matter is that final product is exempted from duty by a notification, but intermediate product ( for captive consumption) is dutiable. We are exporting final product directly under Advance authorisation. Now department is demading duty on captive consumption.

Pl give opinion.

Regards

S.K.Bansal

Excise duty is not required to be paid on finished goods which are meant for export though the facility of Captive Consumption is availed. If the same goods are cleared in DTA, duty would be payable as Captive Consumption facility is availed of. Demanding duty by Dept.on export transaction is not sustainable as the goods are attracted duty but the same would be exported without payment of duty under rule 19. The Notification No.67/95 states that duty should not be exempted or Nil on finished goods for the Captive Consumption materaial but not mentioned regarding any export.

In my view, the Department has no basic proof to show that it would be payable on exported goods.

JMS.