rate of duty for empty metal drums, Central Excise

[ganesan subramanian]

Sir

We are receiving chemicals in metal barrels after using the material, we are selling the empty drums as scrap,

Kindly clarify the following :-

1. Whether duty to be collected while clearing.

2. What is the percentage applicable.

3. We already collected 6 % for clearing in the month of January, 2017.

Posts / Replies

[ganesan subramanian]

With due respect to all I thank you for the replies made.

[VaibhavKumar Jain]

In my view no Central Excise duty is payable on the sale/clearance of empty poly bags, empty corrugated box, wooden pallet scrap i.e. packing/packaging material, (in which cenvatable inputs were received and on which credit has been taken) from the factory, in terms of Board’s Circular No. 721/37/2003-CX., dated 6-6-2003 based on the judgement of Supreme Court in the case of M/s. West Coast Industrial Gases Ltd. Vs.CCE. Reversal of credit is also not warranted as these are not non-excisable goods which requires payment of duty under Rule 6(3) of Cenvat Credit Rules. The packing scrap are excisable and duty-paid. The cost of packing material/packaging material/containers i.e. empty poly bags, empty corrugated box, wooden pallet scrap was included in the price of inputs (Cenvatable) and cenvat was availed on that value portion also. Neither CE duty is to be paid on these nor proportionate cenvat is to be reversed at the time of clearance/sale of these from the factory in terms of above circular which still holds good.

Section 2(d) of the CEA defines “excisable goods” which means goods specified in [[the First Schedule and the Second Schedule] of the Central Excise Tariff Act, which are subject to a duty of excise and includes salt; irrespective of the fact that whether CE duty is chargeable NIL by virtue of tariff rate or through any notification. Non-excisable goods are those which are not specified in the First Schedule and Second Schedule of the Central Tariff . Since the said goods i.e. empty poly bags, empty corrugated box, wooden pallet scrap i.e. packing/packaging material are NOT non-excisable goods, these do not fall in the definition of 'exempted goods' and thus payment of an amount equal to 6% of the value of exempted goods is not required under Rule 6(3) (1) as amended vide notification 06/2015 dated 1^st March 2015.