Friday, September 19, 2008

Clearance / Removal of excisable goods

Q:- What is removal or clearance of excisable goods? Explain the various methods of clearance of excisable goods ? Or
Explain the various rules regarding removal of goods?
Mention the control system available to the department for clearance of goods for the purpose of levy of excise duty ?
Explain control for levy and collection of duties of excise in industry?
Ans :- Definition of removal or clearance of excisable goods :-

Removal and clearance are two synonyms . The meaning is same for both.

Removal or clearance means transfer of goods from factory after it finished and excisable .
Clearance is a time when excise officer can demand his excise duty .
Different methods / control / Rules for clearance or removal of goods under central excise Rules

1. Self removal procedure :-

Under this method , assessee is allowed that he can remove or clearance the goods but he must follow the following steps for self removal
1st step à He must record in the production register daily
2nd step à He must prepare invoice
3rd step à He must calculate his duty liability by himself .
4th step à Pass removal entry in production register (Quantity ,rate , duty )
5th step à Pass the debit entry of duty payable at the end of month .
In 1994 gate pass system changed with invoice –base system.

2. Removal of goods under bonds :-

It means assessee has right to remove the goods at concessional rate or exempted from duty goods if he get bond of central excise department with surety or security .

Steps for this method
1st step Application is given by manufacturer to obtain the benefits .
2nd step Excute / get bond with security (it means in future these goods will become excisable , he will pay the duty )
3rd step The amount of bond equal to the exempted amount or concession
Value of duty .
4th step Application shall counter signed by assistant commissioner
5th step Record of concession or exempted goods .
6th step Recovery of duty in certain cases .

3. Removal of goods from Free trade zones (FTZ) or 100% EOU or Special economic zones : ( Rule 17)
If goods produced under free trade zones or 100% export oriented units or special economic zone . The assessee has right to removal after paying its appropriate duty . In some cases govt. can give right to export without payment of duty .

4. Removal on payment of duty or on invoice :- Rule 4

1st way

→ Removal of goods on payment of excise duty is best way for manufacturer and central excise department . Manufacturer never remove until he pay his duty.

2nd way

→ Removal of goods on invoice . It means goods send out on invoice and signed by owner of factory .

5 Removal of input and capital goods under CENVAT :-

The manufacturer credit the duty if he get the input from his supplier .Duty is paid by supplier .

Input as raw material → ↓ → Output as finished goods


6 Removal of goods for export

There are many rules for clearance or removal for export of goods . It deals chapter IX of central excise rules.
Method of removal

1st way

Without seal of central excise department :-
There is limited chance of export without duty but commission has the power to allowed without examination or seal

2nd way

With seal of central excise department

Officer of central excise department is verified that duty is paid on such goods after this he will seal them . ☻