1)We are ABC Pvt Ltd. registered under central excise for manufacturing division. We have received a order from BBC Pvt Ltd for manufacturing XYZ which includes product X & Y as raw materials and our offer value is of Rs 500000/-(we have not consider cost of product Y as it is going supplied on free basis by BBC pvt ltd which is costing to Rs 550000/- because BBC Pvt ltd has a rate contract with his supplier and he gets product Y at discounted rate has compared to other suppliers). So how this transaction will be done without violating the excise rules.
2)Same as above Question no 1 only difference is we have received order from BBC Pvt Ltd. but Consignee is XYZ Pvt Ltd which is a SEZ Unit and excise duty is not applicable under ARE 1 which we will receive from XYZ. So how this transaction will be done without violating the excise rules. how to proceed with transaction if goods are supplied by customer of RS 550000/-.
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Please reply how to go about the transaction.
1) Manufacturer of goods is liable to discvharge the duty liability of total value of goods at the time of clearance, irrespective of the facts that goods are supplied by BBC or not. so the value would be 10.5L ( 5L your value+ 5.5L supplied by BBC) on which duty is leviable
2) XYZ will not provide any ARE1, but he can provide you only copy fo bond and CT-1/3 as the case may be, ARE-1 is the document made by the BBC, submitted to ABC with CY-1/3 received from XYZ, and the goods would be cleared under "physical supervision of central excise officer under excise seal", the range officer of ABC will perform the duties and allow the clearance, ABC will countersign the ARE-1.
Agree with Sharmaji,
If CT-1/3 bond has to be taken by the Principle Saler i.e. BBC Ltd. if BBC Ltd. is merchant Exporter then Menufacturer will make the ARE-1 and the same will be signed by both Menufacturer and Merchant Exporter.
If, BBC Ltd. is also Menufacturer he can also make ARE-1.
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