Tripple shift or continuous processing??

Cos Act provides for depreciation schedule.
I want to know the diference between tripple shifts & continuous shift.
my client has CNC  Lathe machines which are run 24 hrs a day in tripple shify. I want to know whether to apply tripple shift depn rates or Continuous Processing rates?
PLEASE HElp!

Replies (1)

Note-7 of Schedule XIV defines continuous process plant as a plant which is required and designed to operate 24 hours a day.  Para 4 & 5 of guidance note on some important issues arising from  amendment to Sch.XIV to the Companies Act issued by ICAI reads as under:

 

"The words 'required and designed to operate 24 hours a day' are very significant and should be interpreted with reference to the inherent technical nature of the plant, i.e. the technical design of a continuous process plant is such that there is a requirement to run it continuously for 24 hours a day.  If not so run, there are significant shut down and/or start up costs.  If such a plant is shut down, there may be significant spoilage of material-in-process/some damage to the plant itself/significant energy loss.  It is however possible that due to various reasons, e.g. lack of demand, maintenance etc. such a plant may be shut down for some time.  The shut down does not change the inherent technical nature of the plant.  For instance, a blast furnace which is required and designed to operate 24 hours a day may be shut down due to various reasons; it would still be considered as a continuous process plant and the relevant rate as per scheule-XIV would be applicable."

 

You may examine your case in view of above comments and decide accordingly.  It appears that CNC lathe machine will not be categorised as a continuous process plant and you can charge triple shift depreciation.

 

 

 

 

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