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Internal consumption

Shuvam Banerjee (Audit Manager) (39 Points)

28 December 2011

How to treat for excise duty when goods manufactured by a steel company(tmt bars) is used in the same factory for capacity expansion?

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3 Replies

SUNIL (ACCOUTANT) (167 Points)
Replied 28 December 2011

Its a expension of capital good so 100% Cenvat credit available for same year.

Thanking You

SUNIL

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 29 December 2011

Originally posted by : Shuvam Banerjee
	How to treat for excise duty when goods manufactured by a steel company(tmt bars) is used in the same factory for capacity expansion?

TMT bars are building materials, hence no duty credit is allowed for use of such items, as it appears that the same is used for expansion of building, which is not catagorized as capital goods under CCR 2004

CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 29 December 2011

As goods are consumed captively within the factory and has not resulted in production of a dutiable final product, it would attract excise duty liability. The manufacturer of TMT bars that are so consumed will have to pay duty as per Rules in this regard. Moreover as per details given TMT bars are consumed for capacity expansion. If this forms the part of civil structure, CENVAT on same would also not be available.