Trading of exciseable goods / captive consumption

Dear Experts,

Please clarify on the following scenario:

1. We use to purchase exciseable finished goods (textile) by paying the excise duty charged by the supplier and take input credit of the same.  

Whether the finished goods thus purchased should suffer excise duty again when it is sold by us in whole sale to our buyer?

2. We use to supply raw materials and accessories to our job workers for manufacturing finished goods (exciseable). Some of the materials delivered to the jobworkers were procured by paying excise duty for which we have taken input credit.  

Whether the raw material and accessories thus supplied (duty paid at the time of purchase) is coming under the purview of captive consumption and whether duty liability for captive consumption would arise?

3. Please furnish the circumstances where captive consumption arise

Regards,

Govindarajan R

 

 

 

Replies (2)

1) trading concern has no option for excise duty credit, excise duty credit is the facility / option for factory of manufacture or taxable service provider( capital goods only). however if the trader use to branding of such goods then he has to get registered as manufacturer and then pay ED and avail credit.

2) you can send goods under notification no 214/86 or ccr 4(5) challan. its input and not capitive consumption. if the job work amount to manufacture then job worker has no choice but to charge ED on groxx clearance value including the RM supplied by you.

If you are a principle manufacturer and pay excise duty on final product then you can take cenvat credit on inputs or input services. Trander can not take cenvat credit on inputs.

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