Excise duty please help....

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plz answer these questions:

1) if goods are not supplied to independent contractor and contractor manufactures goods on behalf of the customer then can it be still called as jobworker or contractor. if yes as contractor then how excise duty is chargeable .

2) why rule 7 of central excise valuation rules 2000 is applicable even though removal of goods for depot is considered as correct removal and section 4 1 a of central excise act 1944 is applicable ...why Section 4 1 b will be applicale....what is the purpose of rule 7 ....

3) under sec 37B of central excise act 1944 ...can department file an appeal against the circular issued by CBEC ....are they bound to follow it ....act doesnt clarifies properly....

4) Under section 3A of central excise act 1944 what is the purpose of explanation added regarding additional customs duty because already clearence by 100 % EOU to DTA is not covered by section 3A ( Duty based on production capacity on notified goods )

 

 

Replies (1)

1) No, essential requirement of jobwork is supply of raw material by the person (i.e the principal manufacturer) & the jobworker does not own the excisable goods produced .In your case, the contractor will have to procure the raw material himself and manufacture the goods - hence on sale of such goods, there is transfer of ownership of goods. Excise duty is chargeable on transaction value basis.

2) One of the conditions for S.4(1)(a) is that - the price is for delivery at the time & place of removal. If this condition is not satisfied , then Sec 4(1)(b) comes in to play.
Now in the case of removal of goods to depot, sale of excisable goods is longer at the factory - place of removal  becomes the depot. Hence transaction value has to be computed as per Valuation Rule 7 specified by Central Govt as given under S. 4(1)(a).

4) Nice question.... i believe it talks about NON-Eou entities like FTZ , EEZ,  etc on which additional duty of customs would be applicable (but i'm not 100& +ve)


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