child part of parent product(Part of Product), Central Excise

[RAM SHARMA]

Dear Experts,

We are registered manufacturer in central excise for excisable finished product. Our finished product is liable for excise duty and part of our product is nil rate of duty. Can we sale part of our product without registration in central excise. what precaution should be taken for removal of part at nil rate of duty. Please advice.

Thanks

Posts / Replies

[CA. Surender Gupta]

In case you are the manufacturer of child parts and same is  exempted from central excise duty, you may remove the same without getting the your unit registered with central excise.

But, if you are manufacturing finished products using such child parts, which is is liable to duty of excise, you may be availing Cenvat Credit on the raw material used therein.

Therefore, before removal of child parts without excise duty, if you have availed the cenvat credit on the raw materials, you need to reverse the credit as per Rule 6 of Cenvat Credit Rules, 2004.