same inputs used for manufacture and processing

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..... same inputs used for manufacture and processing
Query (Issue) Started By: - Dalia Felix Dated:- 23-6-2015 Last Reply Date:- 23-6-2015 Central Excise
Got 3 Replies
Central Excise
We are registered with the Excise department as 'manufacturer of excisable goods'. It is also possible to conduct certain processes not amounting to manufacture on the inputs purchased and clear them a .....

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..... t a higher price. We generally take full cenvat credit of the excise duty paid on purchasing the inputs. Thus, common inputs are used for the manufacture of excisable goods and also removed after partial processing. Thus, inputs are not 'cleared as such'; but after partial processing. Since the processing does not amount to manufacture, excise duty is not collected. What is the amount of .....

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..... excise duty to be reversed when the partially processed inputs are removed? What are procedures to be followed so that the excise duty paid on the inputs are available to us or the purchaser (of the value added inputs) as CENVAT Credit? What about the applicability of Rule 6 of CENVAT Credit rules on these types of transactions? Reply By Mehul Pandya: The Reply: You should collect service tax .....

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..... on processing charges where process does not amounts to manufacture. as far as cenvat credit concerns, you can reverse proportionate input credit. Reply By Rajagopalan Ranganathan: The Reply: Sir, If the process to which you subject the inputs does not amount to manufacture, then you are liable to service tax on such processing because such process amounts to rendering of an output service. Si .....

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..... nce you are paying service tax on the processed inputs you need not reverse any ;amount; under rule 6 (2) of CENVAT Credit Rules 2004. Reply By Arun Kumar Singh: The Reply: You are doing two activity one is falling under manufacturing category and another is trading as such. You have 3 option under rule 6(3) of cenvat credit rules 2004. (i) maintain separate account for both activity. (ii) Rever .....

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..... sal of cenvat credit on proportionate way and (iii) Pay excise duty at the rate of 6% on exempted goods.
Discussion Forum - Knowledge Sharing .....

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