Error in quantity declared in cement bags – if there is excess clearance pay duty; if there is shortage…?
Board notes that though cement is required to be packed in 50 kg bags, there is possibility of excess or shortage but the logical Board also notices that a manufacturer cannot afford to supply excess quantity of cement in all such bags and neither will buyers accept short quantity in all such bags. In other words, there are likely to be only few cases wherein such excess or short quantity has been supplied. But over a period of a time for instance one month, the total quantity supplied after due adjustment of the excess or shortage in each bag, should be more or less equal to the total quantity sold by a manufacturer.
So Board wants to clarify that
++ at the end of the month, the manufacturer shall calculate the net variation in total quantity actually delivered in a month and the quantity on which duty has been paid
++ if the net quantity delivered (after adjusting the excess and shortages in each individual bag) is more, he should then pay duty on the said excess quantity.
++ Records of actual weighment of bags such as weighment slip, production records etc. should be maintained by the manufacturer so as to enable verification at the time of audit or other checks.
++ if duty is not paid on the said excess quantity along with the monthly duty liability, then interest as applicable is liable to be paid.
++ The said excess quantity on which duty is paid shall also be reflected in the monthly returns being filed by the manufacturer.
Board has issued a draft circular on the above lines. The final circular is sure to come soon. An additional para in Audit Notes will be non levy of duty on 300 grams of cement cleared in excess of the quantities shown in the records. And what will happen in case of shortages. Can the manufacturer take refund? Why is the Board silent in this? Heads I win, tails you lose!
Draft Circular in F.No. -6