Intermediate goods taxable when final product exempt

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2014 Hello,
Suppose ABC ltd manufacture agricultural sprayers both hand operated and battery operated . Now in production of the sprayer a pvc tank is manufactured as intermediate goods and all other parts are assembled to manufacture the final product sprayer. Agriculture Sprayer is exempt from excise duty but tank which is manufactured in the premises of ABC ltd is taxable as per excise department .Tank in same capacity is unsaleable product . Renowned manufacturers from other state also dont pay excise duty on the same . Can anyone give me case details of some similar case law .????

Arun Kumar Singh

Arun Kumar Singh (Expert)
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14 March 2014 Intermediate goods manufactured in the same premises when manufacturing final product is exempted then no need to pay excise duty on intermediate goods. If units are separate then pay to excise duty on intermediate goods but ssi exemption will be available upto 1.5cr.