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Capive consumption

25 June 2014

What will be the excise treatment in case an exciseable final product is captively consumed for project activities(as Fixed assets)? Will it be valued at 110% and the 50% duty credit be taken in first year? Please clarify. How will the value of such goods be accounted for in book of accounts?

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2 Replies

JAINENDRA JAIN (ACS/CA) (1668 Points)
Replied 25 June 2014

You need to pay the excise at 110% of cogs computed as per cas-4. However you must consume 100% of ypur production than only you can pay duty as said above under rule 8. You can avail 100% credit of duty in year of payment itself.

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Satish Raj Pahari (Article) (35 Points)
Replied 26 June 2014

Please clarify whether i am correct or not, in the case pointed out: 1. company will value the production at 110% of cogs. 2. company will book sales of same: Customer(Company) a/c Dr 123.60 To Sales 110 To Excise Duty Recovered (110*12.36%) 3. on the other side company will book purchase of project related goods: Project a/c dr 110 RG 23C PartII dr 6.8 Cenvat Hold a/c dr 6.8 TO Vendor(Company) 123.60 Is this the correct accounting treatment? Thank you in advance.