Input credit on full value product on captive consumption

Dear Sachin,

Please explain in full, what composition scheme you are availing before answering you.

Regards

HS Negi

@ R S Negi

composition scheem as per notification number 1/2011 @ 2% is availed

raw material is cement; product A is RMC (ready mix concrete);product B is cement bricks

this is the full details about the product

regards

sachin

As per notification no. 67/95 , if goods cleared and used for captive consumption for manufacture of dutiable goods, then captive consumption is exempted from excise duty liability. Howwver, if goods cleared for captive consumpion going to use in manufacture of exempted goods, then goods used as captive consumption chargeable to duty. at an applicable rate. Since, you product A and B is dutiable goods, no need to pay excise duty on product A which going to use in product B (final product) by virtue of notification no. 67/95

Further, you are eligible to avail cenvat credit of raw material R used in manufacture of product A aginst excise dutyliability of product B at the time of its clearance from factory.

Thus, first of all work out excise duty liability on prodct B and then deduct Cenvat credit of excise duty paid on raw material R dully supported by excise invoices. Remaining amount is liable to pay through PLA.

Dont forget to mention exemption details in ER-1 alongwith notification no..

Thanks and Regards,

Manoj B. Gavali