intimation regarding trial/commercial production, Central Excise

[Arunachalam siva]

Sir,

pls clarify whether the assessee has to intimate to dept for commencing trial production. which rule/section instructing the same.

Posts / Replies

[Ganeshan Kalyani]

Only intimation to jurisdictional excise authority is suffice.

[Rajagopalan Ranganathan]

Sir,

If you took registration before starting the trial/commercial production then you give a simple intimation letter to your jurisdictional range officer. There is no specific provision either under Central Excise Act or the rules made thereunder to give such intimation.

Rule 9 of Central Excise Rules, 2002 stipulates that-

(1) Every person, who produces, manufactures, carries on trade, holds private store-room or warehouse or otherwise uses excisable goods or an importer who issues an invoice on which CENVAT Credit can be taken, shall get registered:

Provided that a registration obtained under rule 174 of the Central Excise Rules, 1944 or rule 9 of the Central Excise (No.2) Rules, 2001 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules.

(2) The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration.

(3) The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board.

No time limit has been prescribed for taking up registration under Notification No.35/2001-C.E. (N.T.) dated 26.6.2001 as amended which is issued in exercise of the power conferred under rule 9 (3) of Central Excise Rules, 2002. Actually this Notification was issued under Central Excise (No. 2) Rules, 2001 and continue to have the effect even under Central Excise Rules, 2002.

[Arunachalam siva]

Thank you very much for valuable reply. We have registered our unit already. Hence, an intimation to dept before starting commercial production will be sufficient . am i correct?.

[Rajagopalan Ranganathan]

Sir,

Yes. you are right.

[KASTURI SETHI]

Sh.Shiva Ji,

I support the views of both experts.

The date of intimation regarding the commencement of production to the Central Excise Department is very very crucial for the following purposes:-

.1. If you want to claim exemption from VAT or Purchase Tax the letter submitted to Range Office will be the basis.

2. The date of commencement of production is very relevant for claiming any area based exemption.

3. It is very important if the product falls under compounded levy scheme.

4. The date of intimation will serve so many purposes from the State Industries Department

5. The date of intimation of commencement of production is very useful for Income Tax Department also

6. For SSI units the date of registration with Central Excise Department is the date of commencement of production.

So many other benefits are also available, if you file intimation regarding commencement of production with the jurisdictional Range Officer.

Practically I advise you to file intimation.

[Ganeshan Kalyani]

I support the views of Sri Kasturi Sir.

[MARIAPPAN GOVINDARAJAN]

It is better to give intimation to the Department as told by Shri Sethi.

[YAGAY AND SUN]

Even under Company Law, obtaining certificate of commencement of business is mandatory. As stated by the expert such piece of information/intimation would do only benefit to the assessee/dealer/manufacture to seek certain benefits under State VAT Laws as well.