TREATMENT OF RECOVERED MATERIAL

This query is : Resolved

CA.DURGESH MISHRA (Querist)
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31 December 2009 My question is as follows:-

Product KBR recovered from manufacturing process of product A

Product NABR recovered from manufacturing process of product B

Product LIQUID BROMINE recovered from distillation of product KBR and also from NABR

LIQUID BROMINE is also used as an INPUT of PRODUCT A.

Presently Inventory Record of KBR & NABR is maintined as a work in process (W.I.P)

now my question is whether present system of maintaining record is CORRECT.

or, KBR & NABR should be recorded as FINISHED GOODS and then issue as Input Material for recovery of LIQUID BROMINE.

and is there any requirement for issuing of INVOICE
as per CENTRAL EXCISE FOR CAPTIVE CONSUMPTION.

M Prabhakar Menon

M Prabhakar Menon (Expert)
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01 January 2010 When a by product having its own use and market is produced in the process of manufacture then like all other finished products whether liable to excise duty or not it should be accounted for seperately and not clubbed as work-in-process.Once this is understood all other book-keeping formalities follow. If some quantity of the by product is having captive consumption then the excise rules with regard to captive consumption should be followed for that quantity which is captively consumed.