Query on excise duty

Hello friends,

I am relatively new to excise duty.

Please help me to solve the following query to understand the basics of excise.

Suppose a manufacturer of goods manufactures a product X which is subject to duty of excise under tariff act. In the process  of making product X if an intermediate goods i.e. Y is produced which is also separately subject to excise duty under tariff act. For making one unit of X, a corresponding one unit of Y is consumed. 

Now please tell me whether excise duty shall be charged separately at two stages : 

One at the stage where Y product is made and one at the stage where X is made?

or will it be chaged only on X product.? since all Y product are used for making X product.

Please reply and help.

Thanking in anticipation.

 

Replies (4)

if you are charging excise duty on x and y both then you can claim the credit of y on x.. Ithink there is also a case law on it but im unable 2 recall the it proprly.

U also have to fulfill the rule 9a of central excise where u have 2 gve informantion to suprintendent abt the principal inputs used in mafg. the final product.. u also go through rule 9a..

Originally posted by : Ankit Mehra

if you are charging excise duty on x and y both then you can claim the credit of y on x.. Ithink there is also a case law on it but im unable 2 recall the it proprly.

U also have to fulfill the rule 9a of central excise where u have 2 gve informantion to suprintendent abt the principal inputs used in mafg. the final product.. u also go through rule 9a..

Production of intermediate goods are treated as manufacture in terms of provisions of Sec 2(f( of CEA,1944.Excise duty payable on production and its subsequent removal for production of final product is exempted if FINAL PRODUCT IS NOT EXEMPTED.Thus If your paying duty on X you need not to pay duty on Y.But If X is exempted(different form logic that you doesnt have paid duty) i.e you dunt have to pay duty on it THEN DUTY ON Y SHALL BE PAID.

REFER NOTIFICATION NO 18/2006

Your qurery is not clear.If y is produced/manufactured for making of X only then product Y is captively consumed for the production of X and is exempted from Excise duty even if it is a distinct product. 

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