Excise

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Believe in Yourself

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139 Points Joined September 2009

Plz rep,

Central Excise levied at the tym of production but payable at the time of removal of goods.

Now my query is that the company used to pay the excise at the time of sale, it has sold 70000units and paid the duty and produced 80000units of a product, but had not made any provision in regards to duty payable on closing stock of 10000units.

is it mandatory to make provision for these units, or is it ok to pay duty at the time of removal and no need to make provision for the same.

Plz rep asap...

Thanks in anticipation.

Replies (2)

MudraMantri

Wantapreneur

491 Points Joined September 2010

Hi BIY,

Under section 3 of CEA, duty is attracted on goods immediately on their manufacture. However, collection is postponed till thier physical movement, under rule 4 and 5 of CER 2002.

Thus it is the Removal of goods rom the place of manufacture/storage is relevant and not the sale in first place. Secondly, the goods once manufactured is laible for excise payment. hence, creation of provison is imperative, once the goods are manufactured.

Thus, liability exists much before the removal coming into picture.

And hence, provison should be created.

Regards