Molasses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2012 As per Rule 4 of CER 2002 excise duty is paid at the time of removal of goods from factory however in case of molasses,excise duty is paid at the time of receipt of molasses by the purchaser.

can anybody let me know the reason ( logic) for above exception.

Thanks & Regards

RENGARAJ R.K

RENGARAJ R.K (Expert)
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17 July 2012 As per excise rules, it is an exceptional case.

The Rule says, "exception with respect to duty payment on molasses. Where molasses are produced in a khandsari sugar factory, the person who procures such molasses, whether directly from such factory or otherwise, for use in the manufacture of any commodity, whether or not excisable, shall pay the duty leviable on such molasses, in the same manner as if such molasses have been produced by the procurer.

For the purposes of the said rule 4, excisable goods manufactured in a factory and utilised, as such or after subjecting to any process, for the manufacture of any other commodity, in such factory shall be deemed to have been removed from such factory immediately before such utilisation.

Such treatment is rare in excise rules, but the court has admitted this special rule vide Ranson Industries Vs UOI.