Sunflower Incorporated

Sunflower Inc. is a large distribution company with over 5000 employees that
functions as a bureaucracy, which needs to formalize its pricing and purchasing
practices. The company purchases and distributes snack foods to retail stores
across North America. Sunflower has one corporate office and the company is
divided into twenty-two regions. Each region operates as an autonomous small
business, which consists of its own leadership. Characterized by emphasis on being
fast and flexible in responding to the environment. Even though Sunflower prefers
to use the small business approach to increase profits the company as a whole is illequipped to respond to environmental and market shifts, as well as some small
companies, this is evident by the companys inability to stay competitive. In
addition to that, the company is suffering because it has not focused on improving
its technology. Its primary focus or concern is optimization, increasing profits and
standardizing business functions. While organizations should be concerned about its
bottom-line, it should also focus on flexibility, innovation and technology. These
components are the true essence of a true organization. However, organizational
size is not the primary challenge for Sunflower but rather how to simultaneously
function as both a large and small company. Joe Steelman, Sunflowers president
understood that the company needed some restructuring if it was going to survive
in the then current market. And Sunflower Inc. has hit the formalization stage in its
organizational life cycle, hence the implementation of a standardized financial
reporting system. Then the Organization appointed Agnes Albanese to flourish and
resolve the issues and change things around to be in favor of the origination.

Excise Duty
Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are
meant for home consumption. The taxable event is 'manufacture' and the liability of central excise
duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is paid by a
manufacturer, who passes its incidence on to the customers

As incidence of excise duty arises on production or manufacture of goods, the law does not require the sale
of goods from place of manufacture, as a mandatory requirement. Normally, duty is payable on 'removal' of
goods. The Central Excise Rules provide that every person who produces or manufactures any 'excisable
goods', or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner
provided in rules or under any other law. No excisable goods, on which any duty is payable, shall be
'removed' without payment of duty from any place, where they are produced or manufactured, or from a
warehouse, unless otherwise provided

1.

Sale

2.

Transfer to depot etc.

3.

Captive consumption

4.

Transfer to another unit

5.

Free distribution

Excise Duty:

Rules for Levy of Central Excise

The Central Excise Rules, 2002 (Section 143 of the Finance Act, 2002)

The Central Excise (Settlement of Cases) Rules, 2001

The Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable
Goods) Rules, 2001

Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000

Consumer Welfare Fund Rules, 1992

The Central Excise (Advance Rulings) rules, 2002

Central Excise (Compounding of Offences) Rules, 2005

Classification of Goods and Rates of Excise Duty

Classification of Goods and Rates of Excise Duty

In order to determine the rate of excise duty on goods, classification is prerequisite. Excise duty
payable is based on the classification of goods given in the Central Excise Tariff Act, 1985 (CETA). The

Act gives a list of items chargeable to Central Excise duty. It is divided into 96 Chapters grouped in
twenty Sections. Each of these twenty sections relates to broader class of goods such as Section I
relates to Animal and Dairy Products, Section VI relates to Products of Chemical and Allied Indu
The Central Excise Tariff Act was amended in 2004. Earlier there was six digits classification code for
classification of the goods, which has been replaced by 8 digits classification code. With introduction of
this 8 digits classification code, a detailed classification of the goods is now available
In Central Excise Tariff, against each item a rate of duty has been prescribed. These are normally termed as
"tariff rates". In order to determine the rate of duty on a particular product, first find out the chapter
heading under which the item is classifiable. Against that classification, the corresponding tariff rate has to
be read with the exemption notification, if any. Thus, effective rate of duty on an item is obtained

Different kinds of Excise Duties

Basic Excise Duty : This is the duty leviable under First Schedule to the Central Excise Tariff Act,
1985 at the rates mentioned in the said Schedule.

Special Excise Duty : This is the duty leviable under Second Schedule to the Central Excise Tariff
Act, 1985 at the rates mentioned in the said Schedule. At present this is leviable on very few items.

Additional Duties of Excise (Textiles and textile Articles) : his duty is leviable under section 3
of the Additional Duties of Excise (Textiles and Textile Articles ) Act, 1978. This is leviable at the rate
of fifteen percent of Basic Excise Duty payable on specified textile articles.

Additional Duties of Excise (Goods of Special Importance) : duty is leviable under the
Additional Duties of Excise (Goods of Special Importance) Act, 1957 on the specified goods
mentioned in its First Schedule.

National Calamity Contingent Duty - Normally known as NCCD. This duty is levied as per section
136 of the Finance Act, 2001, as a surcharge on specified goods.

Excise Duties and Cesses Leviable Under Miscellaneous Act - On certain specified goods, in
addition to the aforesaid duties, prescribed rate of excise duty and cess is also leviable.

Education Cess on excisable goods is levied in addition to any other duties of excise chargeable on
such goods, under the Central Excise Act, 1944 or any other law for the time being in force.