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Excise Registration Limit

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Sanjay Dwivedi (Advocate & Consultant) (143 Points)
Replied 01 August 2008

I may summarise the questions and answers as under:

Question 1. Is the job-work turnover to be included in computing exemption limit of Rs. 1.5 Crores?
Answer: Firstly, if the process undertaken by you does not amount to manufacture, the job-charges are not to be counted while computing the exemption limit.
However, if the process amounts to manufacture, the Job-work turnover will not be included if the following two conditions are satisfied:
a.       The principal (for whom you are doing job-work) has a factory and is engaged into manufacture of the goods.
b.       The principal supplies you any one of the following:
-          He supplies material under challan under Rule 4 (5) of Cenvat Credit Rules, 2004 (he can do this only if he is registered with excise, avails credit on the input & pays duty on the final product)
-          He gives an undertaking under notification 214/86-CE to your Division office and supplies material to you under challans mentioning that it is a supply for job-work under notification 214/86-CE (He can do this only if he pays duty on the final product).
-          He gives an undertaking under notifications 83/94-CE and 84/94-CE, to your Division office and supplies material to you under challans mentioning that it is a supply for job-work under notification 83/ 94 & 84/94 –CE (He can do this if he too is a SSI unit and does not pay duty on the final product because his turnover is below 1.50 Crores).
If the conditions are not satisfied, then you will have to count in your exemption limit
a.       The job-charges; as well as
b.       The cost of material supplied free by the principal.
 
Question 2. Whether supplies made to government institutions under notification 10/97-CE are to be included within 1.5 Crores exemption limit.
 
Answer: No. In fact any supply which is exempted from excise duty, is not to be included in the exemption limit of 1.5 Crores. Obviously, one must fulfill conditions of the exemption notification.
 
Question 3: A SSI unit has total turnover of Rs.  500 lacs, out of which goods valued at Rs.  200 lacs were cleared under band name of another person. Is the unit entitled to exemption.
 
Answer: Let’s assume that the above said turnovers were during the year 2007-08 and that we want examine availability of exemption in the year 2008-09.
 
For the purpose of computing clearance limit of 400 lakh in the previous financial year, the value of goods bearing brand of another person is not to be included. Thus, previous years turnover would be only 3 lakhs.
(Ref. paragraph 3A to the notification 8/2003). In the current year, he would be entitled to clear goods (without another persons brand) under exemption till 150 lakh.
 
Question 4: What is the turnover limit for registration under C. Excise?
Answer: Notification 36/2001-CE (NT) exempts a person from registration if his goods are exempted or are chargeable to nil duty. [However, they are required to file a declaration in April every year. SSI units are required to file the declaration when their turnover crosses Rs. 90 Lakh. Others are to file it from the very beginning. Practically very few units file such declaration]
 
Thus, one needs to get registered only if he becomes liable to pay duty. In case of units availing SSI exemption they need not obtain registration till their turnover reaches 1.50 Crores. However, if the unit desires to pay duty even before his turnover reaches the limit, he will have to take registration.

 



(Guest)

Dear sir,

I am in process of setting up an manufacturing unit at Bommala Ramaram, Andhrapradesh for 500 TPH capacity of fully Autimised Crushing Plant and the unit will be under SSI registration. All the Machineries are being imported from German.

To fullfill all our statutory obligation I would like to know, do I need to go head with Central Excise registration ? If so what are the procedure of registration? and is registration Forms can be downloaded from Entral Escise Website or any other sources.

On line registration is available?

I shall wait for your helpfull reply.

Regards

T. Madhava Rao

 

 


(Guest)

Dear Sir,

We are availing CENVAT credit and paying duty from 0 turnover. During August 2007 we have supplied material to Deptt of Atomic energy with exicse exeption certificate 10/97.

We have not charged any excise to DAE and have not paid any excise. There was not a single raw material used for manufacturing this item on which we have taken credit. Now the range officer is asking for 10% of the cleared amount as excise. Where as there is no such provision under General Exemption no. 37.

Can somebody give me proper guidance?

 

 


Sanjay Dwivedi (Advocate & Consultant) (143 Points)
Replied 29 August 2008

This refers to the query of Mr. T. Madhava Rao.

C. Excise is attracted only if you manufacture something. The first question to be answered is - whether the process undertaken in your factory amounts to manufacture of goods. If no - you are not required to pay C. Excise duty and are not required to follow any C. Excise procedure.

However, if the answer is yes, determine classification of the goods under C. Excise Tariff.

In the first year, you could be entitled to avail exemption upto your clearance value of Rs. 1.50 Crores. (You will have to see notification 8/2003-CE. This is available in the Tariff).

At present online registration is not available.

Books: You can refer the C. Excise manual by R. K. Jain and books by Mr. V. S. Datey.

Websites:  

https://www.cbec.gov.in

https://dateyvs.com/index.htm

 

 

 

 

 

 

 


Sanjay Dwivedi (Advocate & Consultant) (143 Points)
Replied 29 August 2008

This refers to the query of Harshadbhai Ukani.

Rule 6 of Cenvat Credit Rules, lays down the basic principle that Cenvat Credit is not available on that quantity of inputs (and 'input services') which is used in manufacture of exempted final products. Where the inputs are common to dutiable and exempted goods, there are three alternative mechanisms to pay back the credits. One of them is - paying 10% of the price of the exempted goods.

Since, in your case, you have not availed Cenvat Credit on the inputs used to manufacture the exempted goods, there is no question of paying 10% etc. There will be a question of proving this fact.

Difficulty will arise if you avail credit on some common 'input services'.

 

 




(Guest)

Dear Sanjayji,

Thanks a lot for your reply.

Does telephone bill will be considered as common input services or it is purly service related to manucturaing of that items?.

We are taking service credit for mobile telephone bill of director. No other credit is availed.

With regards

Harshdbhai Ukani

 

 

 


(Guest)

Respected Sir,

I am having an SSI units and falling under Second option i.e. taking cenvat credit from 1st Invoice. My total turnover includind export sales and sales to EOU unit is 1. 05 crores for 2007-2008. Our Regd. office is situated in A'bad and unit is Pvt. Ltd. company.

My brother is engaged in same line of business and producing same item. I have no any interest directly or indirectly in my brother's unit. But as a family member I am supporting him in terms of use my office address as Administrative office, so that his clients can communicate and correspondence easily as unit is located in remote area.

Now my question, IS IT PERMISSIBLE BY LAW ? SHALL WE KEEP THE RECORDS IN SINGLE PRIMISES OF OFFICE ?

Your reply in this regard will highly be appreciated.

Thanking you.

ANIL DHAMEJA

 

 


Vijay K. Agrawal (Service) (608 Points)
Replied 24 September 2008

Dear Anil,

Central Excise registation is given for Manufacturing location, which you are telling is in remote area. you can keep records in single premises. bt pl earmarked the separate area and keep separate records otherwise in case of raid or search you may land up in problem.

so far as central excise is concernd records are to be maintained at factory irself.

 

Regards

Vijay Agrawal


(Guest)

 

 
Respected Sir,
 
We have two manufacturing  units in same state, Some times we need to transfer raw material to each others. Both units are registered under central  excise.
 
My question is that on transfer of as such input to each other what transaction value is applicable ?
   
Is 10% have to add on basic value?

Rgds,

Pravin Roy


(Guest)

I want to know the SSI limit for manufacturing automobie industries.




(Guest)

What is the turnover limit to file declaration in case of ssi units having turnover of less than 1.5 crores. What if the declaration is not filed??


(Guest)
Originally posted by :Sanjay Dwivedi
"

This refers to the query of Harshadbhai Ukani.
Rul

e 6 of Cenvat Credit Rules, lays down the basic principle that Cenvat Credit is not available on that quantity of inputs (and 'input services') which is used in manufacture of exempted final products. Where the inputs are common to dutiable and exempted goods, there are three alternative mechanisms to pay back the credits. One of them is - paying 10% of the price of the exempted goods.
Since, in your case, you have not availed Cenvat Credit on the inputs used to manufacture the exempted goods, there is no question of paying 10% etc. There will be a question of proving this fact.
Difficulty will arise if you avail credit on some common 'input services'.
 
 

"


 

Sir,

our company is S.S.I. unit, every time we are avaling the s.s.i exemption limit (1 cror) by informing the Department, this time we forgot to inform department that we are avaling s.s.i exemption. sir please let me know the impact

ramana kumar

 


baburajendra prasad (tax consultant) (38 Points)
Replied 08 December 2008

Originally posted by :Tarun
" I have one Proprietory SSI Unit and we are doing Job work (party supply their material to our works and we machined the item and return back to party) as well as Supply the complete manufactured Item.
I wants to know the limit for Excise Registration.
This year my Job Work turnover is Rs.1Cr and Manufacturing Item turnover is Rs.30Lakhs. Based on this values weather I have to take Excise Registration Certificate for Next year?
Awaiting your reply.
RegardsTarun T Patel
"


 


(Guest)
Question 2. Whether supplies made to government institutions under notification 10/97-CE are to be included within 1.5 Crores exemption limit.
 
Answer: No. In fact any supply which is exempted from excise duty, is not to be included in the exemption limit of 1.5 Crores. Obviously, one must fulfill conditions of the exemption notification.

Dear Sanjay

With reference to your reply above, do we have any case law or any ruling where this view has been taken? Pls let me know the basis as to why we should not include the supplies made to governement agencies. Also, if a company supplies goods to both i.e. govt. agencies and private persons then what all will be included in turnover.

 

Regards

Sumit




Shailesh Kakkad (Executive) (24 Points)
Replied 01 May 2009

Originally posted by :Guest
" I have one SSI unit and availing SSI Exemption for Rs. 150.00 Lacs and sales near about per annum is 40-50 lacs. i have one more unit and the item sales in this unit is exemt for the duty & the trunover of the unit is 450  Lacs per annum. please let us know we can avail SSI exemption in Unit-I or not.. "


 



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