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Excise query ... plz help guys

K12345D (Student) (31 Points)

13 March 2012

Hi friends

plz help me out with this query ...

An assesse purchases raw material (Yarn) and manufacters finish product (Fabric) .

Now, he pays excise on Yarn .... bt dere is no obligation to pay excise duty on Fabric to be sold .... so he cannot book CCR ....

is dere any way by which this excise duty can be saved ??

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8 Replies

Prashanth (Chartered Accountant) (2322 Points)
Replied 13 March 2012

Hi,

Will u be more clear on the question

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vishnu (job) (75 Points)
Replied 14 March 2012

as u r end product is not dutiable cenvat credit is not eligible and invariable you have to add the excise duty on yarn to the cost of fabric and to save this you have to manufacture the dutiable fabric. In case the fabric is meant for export you can procure the yarn on advance authorisation or any other benefits allowed as per foreign trade policy.

K12345D (Student) (31 Points)
Replied 14 March 2012

hi vishnu , thanx fr d answer but i want to knw that the excise deptt has a special power whereby they can waive off the duty to be charged on raw material as the end product is not dutiable .... i want to knw bout tht as it is the only measure tht i can adopt so tht the duty is not charged ..... i want to knw the basis of tht power ....

Y. S. Ghodvaidya (Sr. Accounts Executive) (67 Points)
Replied 14 March 2012

Hi Vishnu, K12345D

Here I am Suggesting you that if the the your Finished product not dutiable cenvat credit is not eligible to you , And excise payment on your yarn is mandatory for you.

CA Nikhil Jhanwar (CA,CS) (4447 Points)
Replied 14 March 2012

Textile products are covered by notification No. 29/2004 & 30/2004 -CE. You may pay concessional rate of duty and take credit in view of Notification No. 29/2004. While under Notification No. 30/2004 You will not have to pay excise duty and you will not eligible for Cenvat credit.

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CA Nikhil Jhanwar (CA,CS) (4447 Points)
Replied 14 March 2012

Concessional rate of duty has been increased from 4% to 5% under notification No. 29/2004 dt. 09.07.2004

Chirayu Kothi ( Consultant Excise and Service Tax) (248 Points)
Replied 14 March 2012

Check notfn 1/2011 dt 31/03/2011 if duty on fabrics or not. You can hav 2 options to pay duty 1% and not to avail Cenvat or pay duty 5% and avail cenvat credit.

CA Nikhil Jhanwar (CA,CS) (4447 Points)
Replied 15 March 2012

Originally posted by : Chirayu Kothi
	Check notfn 1/2011 dt 31/03/2011 if duty on fabrics or not. You can hav 2 options to pay duty 1% and not to avail Cenvat or pay duty 5% and avail cenvat credit.