Central Excise Compliance Checklist

8/12/2019 Central Excise Compliance Checklist

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Scheme of the Compliance ManualThe manual is divided into six parts. First part consists of details of the compliance to be

completed on daily basis. Second partconsists of the details of compliance that is to be ensuredon periodical basis except the daily compliance. Third part consists of the details of the

compliance to be done on happening of some event and export procedures. Fourth partconsists

of the details of the records to be maintained Fifth partcontains details about specific procedural

compliance. Sixth partmentions certain details that we need from locations to make compliance

system more accurate and to the point.

Each part provides explanatory notes and guidance note to facilitate personnel handling

compliance. For reporting compliance the respective compliance officer needs to fill in the

details in the manner provided in guidance note.

n case of any difficulty or in case of any suggestion for the improvement of the manual! pleaseintimate "egal Compliance Team at #ead $ffice.

%bbreviation

CE&' Central Excise &ules! ())(

CC&' Cenvat Credit &ules! ())(

&*C' &emoval of *oods at Concessional &ate of +uty &ules! ()),

CE-&' Central Excise -aluation &ules! ()))

CEM' Central Excise ManualCE%' Central Excise %ct

Part one- Legal compliance to be ensured on daily basis

,


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(. For legal audit personnel

a. 1lease check at the time of audit! as to at what time during the day! daily compliance

is done.

b. 1lease check whether documents are maintained properly.

c. 1lease also check the contents of the documents and confirm that it is maintained asper law.

Part t)o- *ompliance to be done on periodical basis except daily compliance'

Sr

/o.

Compliance re0uired to

be done

1rovision2Form Time frame2

Explanatory note! if

any.

&emark of

1ersonnel

handlingcompliance

-erified2%u

dited by

3%4 354 3C4 3+4 3E4 3F4

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,. ;tili?ation of the

CE/-%T credit

accumulated during the

previous month

&ule 6364 CC& 5efore :th day of

the month

EN (#!"

( 1ayment of excise duty

in respect of clearance

made during theprevious month

&ule @ of CE&.

T&A Challan

$n :th day of the

month

EN (#!#"

6 1ayment of excise in

respect of clearance

made during +arch

&ule @ of CE&.

T&A Challan

$n 6,stMarch.

8 Monthly return &ule ,( of

CE&2 Form E&

>,

5efore ,)th day of

month

: Monthly return of

CE/-%T credit

&ule B3:4 of

CC&2 Form

%nnexure toCC&

5efore ,)th day of

month

EN (#!"

5efore payment of excise duty for the month! the CE/-%T credit accumulated upto 6, stday of

the month is to be availed.

EN (#!#"

+uty on each clearance should be paid by making debit entry in the 1"%.

uidance Note for reporting compliance'

% For personnel handling compliance

a. 1lease intimate exceptions to the above! if any.

5 For legal audit personnel

a. 1lease check at least two months returns and periodical forms2documents on random

basis.

Part three (" E&ent based legal compliance , (#" Export Procedure'

("

Sl /o. Event 1rovision2

Form

Treatment to be given2

Explanatory /ote! if any

&emark of

1ersonnel

handlingcompliance

Checked

by

3%4 354 3C4 3+4 3E4 3F4

,. emo&al of input as

such or after being

partially processed

&ule 8 of

CC&

%t the time of removal of

goods pay amount e0ual to

the Cenvat credit availed

at the time of receiving the

goods

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(. emo&al of capital

goods as such 3without

any use4

&ule 8 of

CC&

Take credit of remaining

:)9 3if returned within

the same financial year of

receipt4 and pay duty

e0ual to the credit taken

6. f final product is

brought back to factoryand send back without

any manufacturing

process

&ule ,A of the

CE&

Take credit of the duty

paid at the time of removaland again pay same

amount of duty at the time

of clearance

8. f final product is

brought back to the

factory and send back

after carrying out some

manufacturing process

&ule ,A of the

CE&

Take credit of the duty

paid at the time of removal

and pay duty at the rate

applicable at the time of

the clearance of the goods

:. *oods cleared for

exports brought back to

factory

C5EC Manual &e>entry within six

months! $riginal

documents should

accompany! intimation todepartment in +>6 form

within (8 hours.


% For personnel handling compliance

a. f for the above events same procedure followed please mention Complied by

following same procedureD. f some different procedure is followed! please mention

the procedure followed.

5 For audit personnel

a. 1lease check procedure followed for different situations and study its legal basis with

the help of complying authority. &eport import highlights.

(#"

Export Procedures

:. Export under .ond

without payment

of duty

&ule ,3,4 of

CE&! /otification

/o. ,)2)83/T4!

8(2),3/T42 Forms

CT>, 7 %&E>,

For procedure see

EN ($!#!"

:


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A Export on payment of

duty under rebate

claim of input

duty ;nder this

procedure after

export! after

export of thegoods rebate of

duty paid on

inputs used for

the manufactureof export goods

can be claimed.

&ule ,@ of CE&!

/otification no.

8,2()), 3/T42

Form %&E>(

For procedure see

EN ($!#!#"

Export on payment of

duty under rebate

claim of duty

paid on exportgoods ;nder

this procedure! atthe time of the

export excise

duty can be paid

and then claimed

as rebate.

&ule ,@ of

CE&2/otification

/o. 8)2()),

3/T42Form %&E>,

For procedure see

EN ($!#!$"

A. eceipt of inputs

without payment of

duty for Export

manufacturing

&ule , 3(4 of

CE&! /otification

/o.

862()),21rovision

s of &*C

For procedure see

EN ($!#!/"

EN - ($!#!"

Conditions and procedures for export of excisable goods under 5ond without payment of excise

duty

,. Conditions' >%. % general bond in the Form %nnexure> or a letter of undertaking in the Form specified in

%nnexure> in lieu of a bond to be filed with the %ssistant Commissioner of Central Excise!

and

5. goods to be exported within six months from the date of clearance from the factory. The timemay be extended by the %ssistant Commissioner on case to case basis! and

C. hen the export is from a place other than registered factory or warehouse! the excisable

goods are in original packed condition and identifiable as to their origin=

(. 1rocedure' >

3a4 $btain certificates in Form CT>, specified in %nnexure> issued by the Superintendent of

Central Excise

3b4 debit in bond account should not exceed the credit available therein at any point of time=

3c4 the goods may be removed without payment of duty after furnishing the letter.

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3d4 For the sealing of goods intended for export at the place of despatch present the goods with

four copies of application in the Form %.&.E.>, to the Superintendent.

EN ($!#!#"

Following procedure is to be followed for export under claim for rebate of the duty paid oninputs'

,. % declaration to be filed with Central Excise department describing the finished goods

proposed to be manufactured along with their rate of duty leviable and

manufacturing2processing formula with. The declaration shall also contain the tariff

classification! rate of duty paid or payable on the materials so used.

(. The +epartment shall verify the correctness of the ratio of input and output mentioned in

the declaration f! after verification! the +epartment is satisfied that there is no likelihood

of evasion of duty! he may grant permission to the applicant for manufacture or

processing and export of finished goods.

6. The goods shall be exported on the application in Form %.&.E. (.

8. The claim for rebate of duty paid on materials used in the manufacture or processing ofgoods shall be lodged only with the %ssistant Commissioner of Central Excise or +eputy

Commissioner of Central Excise having Gurisdiction of the place approved for

manufacture or processing of such export goods.

EN ($!#!$"

Conditions 7 1rocedure'

i. The excisable goods shall be exported after payment of duty.

ii. The excisable goods shall be exported within six months from the date of clearance.

iii. the market price of the goods shall not be less than the amount of rebate of duty claimed

or &s. :)) whichever is lower.

1rocedure

3a4 For the sealing of goods four copies of application in the Form %&E> are to be presented to

the Superintendent or nspector of Central Excise. #e shall seal each package or the

container and endorse each copy of the application.

3b4 The Superintendent shall return the original and duplicate copies of application to theexporter.

3c4 The triplicate copy of application shall be sent either to the officer with whom rebate claim is

to be filed or to the Excise &ebate %udit Section.

3d4 The exporter may prepare 0uintuplicate copy of application for claiming any other exportincentive.

3e4 The claim of the rebate of duty shall be lodged along with original copy of the application.

EN ($!#!/"

1rocedure for obtaining inputs without payment of duty for export processing'

,. Make an application in the Form 3%nnexure 4. Separate application re0uired for each

supplier.

(. % bond is to be executed as directed by the excise department.

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6. The application to be countersigned by the %ssistant Commissioner.

8. $ne copy of the application received from the department to be forwarded to the

manufacturer2supplier of inputs.

:. 1rocedure to be followed by the supplier

a. $n the basis of the application countersigned by the excise department! the suppliershall avail the benefit of the exemption notification.

b. +eclare ratio of input and output and rate of duty payable on excisable goods to beprocured without payment of duty

c. The supplier shall record on the application the removal details! such as /o. and date

of invoice! description! 0uantity and value of subGect goods and amount of excise

duty paid at concessional rate.

d. 1roper account to be maintained indicating the 0uantity and value of subGect goods!

the 0uantity of subGect goods consumed for the intended purpose! and the 0uantity

remaining in stock! invoice wise.

e. a monthly return in &eturn in the format %nnexure to be filed by the tenth day of

the following month.

f. %ny waste arising during the manufacturing process shall be removed on payment of

appropriate duty.

g. The goods shall be exported on the application in Form %.&.E. (.


,. For personnel reporting compliance > f the procedure followed is the same as mentionedearlier! please indicate in column no. 3F4 that same procedure followed. f a different

procedure is followed! please mention that.


1lease study with the help of complying authority the procedure followed and highlight the

important details

Part four - ecords to be maintained 0

Sl

/o.

&egister2 record to

be maintained

1rovision2 Form Manner 7 time of

making entry2

maintaining the record2

Explanatory note! if any

&emark of the

personnel

handling

compliance

+aily stock

%ccount

&ule ,) of CE&2

/o form

prescribed 31ld

4

+escription of goods

manufactured! opening

balance! 0uantity

produced or

manufactured! inventoryof goods! 0uantity

removed! assessable

value! the amount of duty

payable and particulars

regarding amount of duty

actually

Cenvat Credit 1art - para ,.: of &ecord of receipt!

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%ccount CEM2 &ule B384 of

CC&.

31ld #$24

disposal! consumption

and inventory of inputs

and capital goods with

information about value!

duty paid! person from

whom purchased.

Cenvat creditdocuments

&ule B 3,4 of CC& %ny of the followingdocuments in original to

be maintained

a. an invoice issued by

34 a manufacturer! 34

and importer! 34 a first

stage dealer or a second

stage dealer.

1ersonal "edger

%ccount

1art - para (.(

CEM2 Form %nn.

@ CEM

EN (/!"

EN - (/!"

Each credit and debit entry in 1"% is to be made on separate lines and assigned a running serial

number for the financial year. 1"% must be prepared in triplicate. Credit in the 1"% can be made

by making cash payment into the Treasury2or %uthorised 5ank.

uidance Notefor reporting compliance'

,. For personnel reporting compliance >

1lease certify that the records are maintained as per the statutory re0uirement and entries arepassed within the statutory period.


1lease study with the help of complying authority complete system of day to day maintenance of

the records. #ighlight the important details.

Part fi&e Specific procedural compliance'

2! *en&at *redit0

Sl

/o.

+escription Comments! if any! of the

personnel handling

compliance2 Explanatory /ote/o. 3f any4

*EN32T *redit

, CE/-%T credit 3Credit of duty paid on inputs4 is

available to the manufacturer of final product. The finalproduct means excisable goods manufactured or

produced from inputs. The Scheme allows CE/-%T

Credit to be taken of duties such as Excise +uty! SE+!


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%+E! C-+ and educational cess paid on inputs and

capital goods received in a factory 3&ule 6 of CE/-%T

credit &ules! ())(.

The CE/-%T credit can be utili?ed to pay Excise duty

on any final product! inputs cleared as such or after

partially processed and capital goods removed as such.

%ll raw materials or inputs are covered except "ight+iesel oil! #igh Speed +iesel and Motor Spirit.

Similarly! capital goods including pollution control

e0uipment! components! spares! accessories! moulds

and dies and paints! packaging material andgreases2coolants are eligible goods on which credit can

be availed

CE/-%T credit can be taken on the basis of following

documents 3&ule B4

,. %n invoice of the manufacturer! importer or a first

stage dealer or second stage dealer.(. % supplementary invoice

6. 5ill of entryefund of *EN32T credit accumulated due to

export

&efund of CE/-%T credit accumulated due to export

3&ule : of CC&! /otification ,,2())(4 &efund

applicable on fulfilment of following conditions

(. The goods are exported in accordance with the

Central Excise &ules! ())(.

6. The claims for refund submitted not more than once

in any 0uarter in a calendar year. f average export

clearances of dutiable goods in value terms isseventy per cent or more in the preceding three

months! the claims may be on monthly basis.8. %n application in Form % to be filed with %ssistant

Commissioner of Central Excise along with the 5ill

of "ading or Shipping 5ill.

:. The refund is allowed only where a manufacturer is

not in a position to utili?e the credit of the duty on

inputs allowed against goods exported during the

0uarter or month.

A. %part from this there is no provision for the refund

of accumulated CE/-%T credit.

4ob )or5

Hob work is allowed in accordance with the /otification/o. (,82,@A The notification prescribes following

conditions and procedure'

,. Manufacturer to file an undertaking that thegoods shall be used in relation to manufacture of

a dutiable final product or a final product for

export.

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(. Manufacturer maintains proper records to show

that the goods sent for Gob work are used for the

manufacture of dutiable goods or export goods

etc.

6. %fter filing the undertaking manufacturer can

send raw material or semi finished raw material

for processing to the Gob worker8. %fter receipt of the goods back from Gob worker!

the manufacturer can use the goods for the

manufacture of the final product and then clear

the same on payment of duty or for exports etc.:. Sub &ule : of &ule 8 of CC& envisages that

manufacturer can avail CE/-%T credit even on

the inputs and capital goods that are sent to the

Gob worker provided the inputs or capital goods

are received back within a period of ,@) days

from Gob workerIs place.

A. n case goods are not received back within a

period of ,@) days! the manufacturer has toreverse the duty but again can take credit once

goods are received back.

3aluation

The obGective of the provisions of Section 8 of theCentral Excise %ct and the -aluation &ules is to arrive

at the true and correct transaction value or if it is not

possible then to arrive at the nearest ascertainable value

thereof'

Section 8 of CE% envisages that on fulfilment of the

following conditions the transaction value of the goods

will be taken as excisable value'

a. *oods are sold by the assesseeb. For delivery at the time and place of removal!

c. The assessee and the buyer of the goods are not

related!

d. 1rice is the sole consideration for the sale.

For details about transaction value please see EN-(6!"

7arehousing

n respect of certain goods! provision has been made to

store the goods in warehouses without payment of duty.For the details of procedure about warehousing! please

see EN (6!#"

EN (6!"

Jtransaction valueI means the price actually paid or payable for the goods! when sold! and

includes in addition to the amount charged as price! any amount that the buyer is liable to pay to!

or on behalf of! the assessee! by reason of! or in connection with the sale! whether payable at the

time of sale or at any other time! including! but not limited to! any amount charged for! or to make

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provision for! advertising or publicity! marketing and selling organi?ation expenses! storage!

outward handling! servicing! warranty! commission or any other matter= but does not include the

amount of duty of excise! sales tax and other taxes! if any! actually paid or actually payable on

such goods.

Following are the main inclusion in Transaction value'

B. 1acking Charges also packing supplied by the buyer to the supplier.

@. +esign and engineering charges

. Consultancy charges relating to the manufacturing

,). Compulsory after sale service2warranty services

,,. "oading and handling charges

,(. %ny additional consideration flowing from the buyer to the seller is to be

included.

Exclusion from Transaction -alue'

,. Taxes are to be excluded from the transaction value

(. Trade discount and cash discount can be excluded6. $utward handling! freight and insurance

EN (6!#"

arehousing procedure to be followed

a. arehouse to be registered by Excise Commissioner.

b. Consignor to send goods with application KEarlier %&>6L with invoice to consignee.

c. $n arrival at destination! rewarehousing certificate will be sent duly countersigned by

&ange superintendent to his counterpart at the end of consignee.

d. f rewarehousing certificate is not received within ) days! consignor shall pay the duty.

B. 1roper accounts shall be maintained at the warehouse. #e will be responsible for paymentof duty! penalty etc.

uidance Notefor reporting compliance'

,. For personnel reporting compliance >

This part contains important details of statutory provisions. f the same is followed! please inform

the same. n case of any different observation or different practice! please intimate the same.


1lease study with the help of complying authority complete system of excise treatment in case of

different situation. #ighlight the necessary details.

Part six

8etails neededfrom complying authority'

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/ame of the Company

Factory location

Central Excise &egistration /umber

Functional #ead

Complying authorityIs name

+etails of the final products 3%s per excise registration certificate4

Sl /o. Technical name of product Chapter and #eading /o Current excise duty

rate

,

(

6

8

:

A

+etails of nputsSl /o. Technical name of product Chapter and #eading /o Current excise duty

rate

,

(

6

8

:

A

B

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Central Excise Compliance Checklist

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Transcript of Central Excise Compliance Checklist