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Excise on conveyor belt

sony10 (Manufacturer) (113 Points)

20 October 2008

Hello everyone!

Our co. manufactures conveyor belts. Raw material used is all types of steel (M.S., S.S.). So what is the annual sale amount on which excise would come into existence for our company.

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4 Replies

CA. C V SURYAM (Practising Chartered Accountant) (865 Points)
Replied 21 October 2008

Like any other article, the applicable ED is 14% + EC + SHE Cess.

sony10 (Manufacturer) (113 Points)
Replied 21 October 2008

Not the rate of duty sir, the minimum annual sale amount after touching which, the excise will come into existence for our co.

S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)
Replied 21 October 2008

SSI

Exemptions to Small units: SSI units whose turnover was less than Rs. 4 coroes in 2006-07 are eligible for SSI exemption upto Rs 1.50 crores in 2007-08. Goods manufactured with other’s brand name are not eligible.

Choice: a) SSI unit can avail full exemption upto 1.5 crores and pay normal duty thereafter. Such units can avail Cenvat Credit on inputs only after reaching turnover of Rs 1.5 crores in the F.Y.

b) SSI unit can also pay full 100% duty and avail Cenvat Credit. (Full duty not to be paid for previous part of year if option availed in middle of the year; Cenvat to be reversed if unit decides to opt for exemption; Cenvat on stock when unit decides to start availing cenvat credit; Turnover from 1^st April to be considered even if option availed from middle of year)

Slabs in SSI exemption: a) Full exemption from excise unto the first clearance of Rs. 1.5 crores, starting from 1.4.2007, if SSI unit does not avail cenvat credit on inputs.

b) After the turnover crosses Rs. 1.5 crores, full normal duty is payable. The SSI unit can avail Cenvat credit on inputs in respect of inputs used after turnover crosses Rs. 1.5 crores.

Calculation of limit of Rs. 1.5 crores/Rs.4 crores : While calculating turnover or limit of Rs. 4 crores the followings are to be excluded:

a) Clearance means for “home consumption: i.e. that is in India only. Not any export (other than Nepal and Bhutan).

b) Deemed exports- EOU, SEZ EHTP OR STP.

c) Turnover non-excisable goods.

d) Goods manufactured with other’s brand name cleared on payment of duty. **

e) Turnover as trader along with own manufactured goods.

Value for calculating limit: Assessable value as per section 4 i.e. transaction value. When goods are assessed on basis of MRP the value will be determined under sec 4A.

** Some large units get their goods manufactured from small unit under their brand name or trade name. In such cases, the small unit will not be eligible for excise exemption.

But small unit is eligible to SSI exemption if he manufactures different goods under the same brand name. (This view has been rejected by the SC in other judgments 2003 (157) ELT A268).

SSI exemption is not available:

a) If brand name belongs to sister concern,

b) If brand name belong to other SSI manufacturer,

c) If brand name belongs to non-manufacturing trader,

d) If manufacturer puts his own mark in addition to brand name of other,

e) If brand name belongs to related person,

f) If brand name belongs to another unit,

g) If brand name belongs to foreign person or a non-manufacturing trader,

h) If buyer uses the goods captively and does not sale.

SSI exemption cannot be denied:

a) If brand name is not owned by anyone rather no one is claiming ownership of brand name,

b) If brand is not registered in any one’s name,

c) If brand belongs to family name (case of PETHE),

d) “in collaboration with” or “marketed by” or “putting group name”,**

e) ‘House mark’ indicates the name of the person manufacturing goods while trade mark indicates the product by which it is identified or sold. – ELT Vol 214: Part 2 dated 13.08.2007.*

f) Similar logo but not Brand name different,

g) Brand name for a particular product can be used by another for other product only if registered.

h) Brand name affixed in letter head and invoices and not on goods. (2007 (214) ELT, 345 (Tri-Del)

Definition of BRAND NAME – Brand name of Trade name means any name or mark as symbol, monogram, lebel, signature or invented word or writing which is used in relation to the goods for the purpose of indication, or so as to indicate a connection in the course of trade between such goods and some person using such name or mark. The name or mark may or may not indicate identity of that person. The brand name or mark or trade name may or may not be registered.

Hope this is clear to everybody.

Thanks,

S. Banerjee