Download - Introduction to Central Excise

8/12/2019 Introduction to Central Excise

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INTRODUCTION

The Central Excise duties are the largest source of revenue for the country. Approxi ately !"# of the total revenue receipts are collected fro CentralExcise duties. The levy and collection of Central Excise duties is under theauthority of Central Excise Act$ %&''. (ection ! )also *no+n as the chargingsection, provides for the levy and collection of Central Excise duty.

The rate and a ount of duty as +ell as the ite s on +hich duties are levied arethose +hich are indicated in the Central Excise Tariff Act$ %&- and the scheduletherein. The taxa/le event for Central Excise duty as per (ection ! of CEA)Central Excise Act, %&'' is the anufacture or production of goods.

It eans that Central Excise duty is levia/le as soon as the goods areanufactured or produced. The ite s on +hich the excise duty is levied are*no+n as excisa/le goods.

0or the purpose of ad inistrative convenience the actual collection of duty isdone at the ti e of re oval of goods fro the place of anufacture ofproduction. The rate of duty$ +hich is levied$ is the rate of duty applica/le to suchgoods or +hich is in force at the ti e of actual re oval.

Additional Excise Duty )AED,1 2 This duty is levied on certain specified goods inter s of various other statutes such as1

Additional Duties of Excise )3oods of special i portance, ACT$ %& 4 Additional Duties of Excise )Textiles and Textile Articles, ACT$ %&4-

CENTRAL EXCISE CONTROL

0ollo+ing types of control have /een proscri/ed for the levy and collection ofCentral Excise duties1 2

5hysical Control (elf Re oval (che e

PHYSICAL CONTROL

Under the physical control syste the anufactured goods are re oved for theplace of anufacture under the supervision of the Central Excise officers on after the assess ent and pay ent of appropriate Central Excise duty. The goods arere oved on an invoice indicating the duty paid +hich is countersigned /y theCentral Excise officer. The physical control syste is applica/le on in respect ofanufacturers of cigarettes and atches.
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SELF-REMOVAL PROCEDURE.

Under the (elf2Re oval 5rocedure )(R5, the goods are re oved on pay ent of duty and against invoices signed /y the assess. The actual assess ent of theduty paid is done after+ards /y the Central Excise officers on onthly returns

filed /y the assess.

In this case uch ore responsi/ility has /een vested on the assesses to paythe duty correctly and re ove the goods only on pay ent of the duty assessed/y hi . 6o+ever$ in this syste the assesses is re7uired to file a declaration)Rule %4!8 of CER %&'', giving classification of the goods$ tariff heading$ rate ofduty and the exe ption notification availed of if any.

6e is also re7uired to sell the goods against an invoice at prices$ +hich are inaccordance +ith (ection ' of the Central Excise Act %&''. The (elf2Re oval5rocedure also provides that the assesses should aintain records of

production$ re ovals$ ra+ aterial$ 9OD:AT accounts$ accounts of 5;A.9onthly returns are scrutinised /y the Central Excise Officers so as to ensureproper pay ent of duty on the goods anufactured and re oved.

In the record /ased control syste of assess ent ore trust is given to theassesses. The records /ased control is applica/le to


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0or an excise officer or assesses to calculate and deter ine the correctness ofduty paid the crucial date is ost i portant.

The effective date +hich is applica/le to a particular co odity +ill /e the rate inforce on the date on +hich the goods are actually re oved fro the factory in

ter s of Rule &A of the CER2%&''. That is$ the date on +hich the goods leavethe factory is the crucial date for deter ining the rate of duty.

Central Excise Duty - Introduction0or the Assess ent @ear


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he ad &alorem component of excise duty of ;% on petrol intended for sale with a brand name to becon&erted into a specific rate* !onse uently, such

petrol would now attract total excise duty of )s*24* # per litre instead of 3 5;% 6 )s*2" per litre3 7*

he ad &alorem component of excise duty of ;% ondiesel intended for sale with a brand name to becon&erted into a specific rate* !onse uently, suchdiesel would now attract total excise duty of )s*4*-

per litre instead of 3 5;% 6 )s*"*+ per litre3 7* Excise duty on manmade fibre and yarn to be

increased from 4% to 8%* Excise duty on ' < and $ to be increased from 4%

to 8%*

Excise duty on polyester chips to be increased from4% to 8%*

Excise duty on acrylonitrile to be increased from 4% to8%*

he scheme of optional excise duty of 4% for purecotton to be restored*

Excise duty for man1made and natural fibres other than pure cotton, beyond the fibre and yarn stage, to beincreased from 4% to 8% under the existing optionalscheme*

nits using indigenous raw materials0inputs for manufacture of such goods*

(ull exemption from excise duty to be pro&ided ongoods of !hapter ;8 of !entral Excise ariffmanufactured at the site of construction for use inconstruction work at such site*

Excise duty exemption on 3 5recorded smartcards3 7 and 3 5recorded proximity cards andtags3 7 to be made optional* $anufacturers ha&e theoption to pay the applicable excise duty and a&ail thecredit of duty paid on inputs*

E.< compound manufactured on job work for furtheruse in manufacture of footwear to be exempted from
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excise duty* enefit of SS? exemption scheme to be extended to

printed laminated rolls bearing the brand name ofothers by excluding this item from the pur&iew of the

brand name restriction* =n packaged or canned software, excise duty

exemption to be pro&ided on the portion of the &aluewhich represents the consideration for transfer of theright to use such software, subject to specifiedconditions*

Excise duty on branded articles of jewellery to bereduced from +% to @il*

he !ustoms


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!entral excise re&enue is the biggest single source of re&enue for the Bo&ernment of?ndia* he >nion Bo&ernment tries to achie&e different socio1economic objecti&es bymaking suitable adjustments in the scope and uantum of le&y of !entral Excise duty*he scheme of !entral Excise le&y is suitably adapted and modified to ser&e different

purposes of price control, sufficient supply of essential co odities , industrial growth,

promotion of small scale industries and like


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of registration. These are ainly

Those +hose goods are exe pted for pay ent of duty on the /asis of theaggregate annual value of their clearances /eing /elo+ the li it of Rs " lacs.

6o+ever$ even in respect of such units$ they are re7uired to give a declarationto the Central Excise depart ent each year /efore the % th April indicating thegoods anufactured and the value of the annual clearances.

(ection > provides that the prescri/ed person)s, get hi self )the selves,registered +ith the Furisdictional Central Excise Authorities.

Rule %4' of the Central Excise Rules$ %&'' further re7uires every person$ +ho

cures$ produces$ anufactures$ carries on trade$ deals as a /ro*er orco ission agent$ or holds private store roo or +arehouse or other+ise usesexcisa/le goods or a person +ho issues invoice or invoices$ to get hi selfregistered and not to engage hi self in the said activities +ithout a*ing anapplication for such registration to the Furisdictional Range Officer in thespecified for called the GApplication for Registration? R2% )clic* to do+nload,

Reg"s$'&$"o* o# De&le's.

The dealers of excisa/le goods +ho +ish to issue odvata/le invoices$ so as topass on odvat credit to the anufacturers$ have to get the selves registeredunder rule %4' of CER$ %&'' +ith the Central Excise depart ent as per theprovisions of Notification !

The person=persons +ho +ish to get Central Excise Registration has to a*ean application for registration to the Furisdictional (uperintendent of CentralExcise in the for R2%.
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T e &++l"!&$"o* s o)ld !o*$&"*

%. 5articulars of the person applying for registration$ na e of the fir $address$ other details li*e inco e2tax nu /er$ sales tax nu /er$/an*ers na e$ account nu /ers.


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'. On the value or 7uantity of clearances of the goods ade in a financial yearHor

. (u/Fect to conditions$ if any$ specified in the said schedule in respect of suchgoodsH or su/Fect to conditions$ if any$ specified in any notification issued undersu/2rule )%, of rule - or the said rules or su/2section )%, of (ection A of theCentral Excise Act$ %&''$ as the case ay /eH

In such cases the anufacturer has to file a declaration in the for prescri/ed/efore % th April of each financial year .

If the exe ption fro the +hole of duty of excise levia/le is granted$ /ased onthe value of clearances ade in a financial year and the aggregate value of thegoods cleared for ho e consu ption

1"2 by & 0&*)#&!$)'e' #'o0 o*e o' 0o'e #&!$o'"es3 o' 1""2 #'o0 &*y #&!$o'y by o*e o' 0o'e 0&*)#&!$)'e's3

+as less than the specified li it )'" lacs, during the preceding financial year.No declaration is re7uired to /e filed /y the anufacturer.

P'o!ed)'e #o' E +o'$

I*$'od)!$"o*

Exports are an i portant eans of earning foreign exchange$ therefore theyre7uire a considera/le i portance. The Central Excise Rules$ %&'' offer several/enefits of su/stantive nature as +ell as procedural nature for the export ofgoods outside India. Details of +hich are as under

(e*e#"$s &4&"l&ble "* 'es+e!$ o# goods e +o'$ed o)$ o# I*d"&.

The /enefit in respect of duties on inputs used in the anufacture of goodseant to /e exported as +ell as in respect of duty on the finished goods exportedis envisaged under the Central Excise la+. These /enefits are availa/le either

i. in the for of re/ate orii. the clearances of such inputs or finished goods under /ond.

The sche e under +hich the /enefits are ade availa/le$ is incorporated in Rule%< and Rule %! of the Central Excise Rules$ %&''. The /enefit in respect ofduties on inputs used in the anufacture of goods exported$ is availa/le if the
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exporter does not clai dra+/ac* under the Central Excise Duties Dra+/ac*Rules$ %&& . The re/ate of duty in respect of inputs is also not availa/le if thecredit of duty paid on inputs has /een availed of.

E +o'$ )*de' !l&"0 #o' 'eb&$e.

Under Rule %< of the Central Excise Rules$ %&''$ re/ate of duty paid on theexported goods or the duty paid on aterials used in the exported goods$*o$"#"ed #o' $ e +)'+ose3 is granted to the exporter su/Fect to the conditions laiddo+n in the notifications. The various notifications issued under Rule %< are asgiven /elo+

S.No. No$"#"!&$"o* NO. 5 D&$e S)b6e!$

%.'%=&'2CE)NT, dated =&'2CE)NT, dated


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replenish ent of duty paid aterials used in the anufacture ofsuch export goods$ already exported.

The Central 3ovt. has notified the excisa/le goods and aterials to /e used inthe anufacture of excisa/le goods to /e exported$ as per the notifications listed

/elo+1 2

a. Notification no. '4=&'2CE )NT, dated


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The proper officer after identification and verification of the goods +ith AR2'$ and the duty pay ent particulars )in case the export is under clai forre/ate, or after de/iting the running /ond account or against the specific/ond$ shall seal the consign ent +ith the Central Excise seal and a*enecessary endorse ent of the sa e on the AR '.

The original duplicate and the >th

copy of the AR2' are thereafter handedover to the exporter. The exporter desirous of exporting the goods in a container$ are re7uired

to o/tain the per ission of the proper officer and shall also present theshipping /ill duly processed /y the custo s authorities of the port ofexportation or the ICD as the case ay /e$ along +ith the AR2' at the ti eof sealing of the container.

The inspector supervising the container?s stuffing as +ell as the Range(uperintendent +ill a*e an endorse ent on the /ody of the shipping /ill.

The assessees opting for sealing of their consign ent or container arere7uired to pay the supervision charges in ter s of the provisions of$ and

at the rates prescri/ed in the Custo s )0ees for rendering services /yCusto s Officers, Regulation$ %&>-.

Des+&$! o# goods %"$ o)$ e &0"*&$"o* )*de' R)le 789 A.

The assessee can clear the export goods either on pay ent of duty underclai for re/ate or under /ond under the cover of an invoice

6e is re7uired to send the original$ duplicate and six triplicate copies of the AR2' +ith the consign ent.

The triplicate and 7uadruplicate and 7uintuplicate copies of the AR2' shall/e su/ itted to the Range (uperintendent +ithin


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over the factory$ as the case ay /e. The 7uadruplicate copy is sent to the Chief Accounts Officer /y the (uperintendent.

E +o'$ +'o!ed)'e #o' e e0+$ed )*"$s. The exe pted units desirous of exporting their goods are re7uired to file

declaration under notification no. %!=&


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or anufacturers and export the goods under /ond. The erchantexporter can also export goods on anufacturer?s /ond.

6e can also clai re/ate of duty paid on exported goods either fro the Assistant Co issioner of Central Excise having Furisdiction over thefactory of the anufacturer or fro the 9ariti e Co issioner.

The erchant exporter is also re7uired to ta*e disclai er certificate frothe anufacturer as +ell$ in case he +ants to avail the export /enefits.

S+e!"&l +'o!ed)'e $o e +o'$ $o Ne+&l.

Export to Nepal is governed /y special procedure provided in notifications issuedunder Rule %< %!. The procedure is as explained /elo+

No$"#"!&$"o* *o. :9;


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No$"#"!&$"o* *o. 7;


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officer after verification of the goods and sealing the +ould a*e anendorse ent on all the copies of the invoices.

The original copy of the invoice is given to the exporter. Duplicate$triplicate and 7uadruplicate copies under sealed cover are given to the

exporter for delivering the sa e to the Custo s officer incharge of the;and Custo s (tation through +hich the goods are to /e exported. The7uadruplicate copy is for+arded to the Central Excise officer +ho hasaccepted the /ond and 7uintuplicate copy is retained /y the proper officer.

On arrival at the ;and Custo s (tation$ the goods are presented /eforethe Custo s officer incharge along +ith original copy of the invoice andthe sealed cover containing copies of invoices.

The Custo s officer$ after verification of the goods +ith the invoices +oulda*e the endorse ent on the invoice and hand over the original copy to

the exporter. The duplicate and triplicate copies are sent directly to theNepalese or 8hutanese$ as the case ay /e$ Custo officer incharge;and Custo s (tation through +hich the goods are to /e i ported intoNepal or 8hutan.

The Custo s officer incharge of ;and Custo s (tation at Nepal or 8hutan+ill return the duplicate copy of the invoice$ after a*ing an endorse entthereon regarding verification and allo+ing of i port into Nepal or 8hutan$directly to the Custo s officer incharge ;and Custo s (tation in India.

The sa e is eventually for+arded to the Central Excise officer incharge of

the factory or +arehouse fro +here the goods +ere re oved for export.P'o+e' 0&',"*g o# +&!,&ges 0e&*$ #o' e +o'$.

Rule %- provides for legi/le ar*ing of export pac*ages in in* or oil colour +itha progressive nu /er co encing +ith the serial.no.% for each calendar yearand +ith the exporter?s na e and special ar*$ if any.

Assessee see*ing exe ption fro the provisions of Rule %- are re7uired toapply to the Assistant Co issioner of Central Excise having Furisdiction overthe factory.

C e!,l"s$ #o' e +o'$ o# goods )*de' bo*d 1 e !e+$ $o Ne+&l &*d ( )$&* 2.

5lease chec* +hether

a. the goods intended for export are per itted for export to thecountry to +hich exports are intended to /e ade and their exportis not prohi/ited under any la+ for the ti e /eing in forceH


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/. the 7uantity of goods to /e exported has /een ascertained +ell inadvance of the date of exportH

c. the duty involved on the goods eant for export has /eenascertained and appropriate /ond covering the duty ele ent has/een furnishedH

d. the inspection and sealing of the goods to /e exported is desired inthe factory or +arehouse or other point of storage and not at thepoint of export.

A. in case the ans+er is yes$ then12

i, +hether prior inti ation of the intended export in the for AR2')in sixtuplicate, properly filled$ has /een su/ itted to the

Furisdictional range (uperintendent +ell in ti e i.e. at least


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8. If the exa ination of the goods is desired at the point of ship ent$then12

%. +hether the original$ duplicate and sixtuplicate copies of properlyfilled AR2' along +ith the invoice and the goods have /een sent to

the place of exportH


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Under this Rule$ an assessee can send se i2finished excisa/le goods forcarrying out certain anufacturing processes or excisa/le goods for carrying outtests$ +ith a prior per ission of the Assistant Co issioner$ to a Fo/ +or*er+ithout pay ent of duty and to /ring the /ac* or re ove the to anotherregistered pre ises for re oval on pay ent of duty or for export. The provisions

of this Rule do not apply to the goods *no+n as Gprototypes? sent out for trial ordevelop ent tests. The /enefit of this provision is availa/le in respect of se i2finished excisa/le goods only if the anufacturing process to +hich such goodsare su/Fected$ does not result in a change in the su/2heading in +hich the goodshave /een classified.

R)le 9F1:2 > 'e0o4&l o# "*+)$s &s s)! o' +&'$"&lly +'o!essed "*+)$s "*'es+e!$ o# % "! Mod4&$ !'ed"$ &s bee* &4&"led.

The re oval of inputs or partially processed inputs is governed /y the provisionsof Rule 40)', of the Central Excise Rules$ %&''. The inputs and partially

processed inputs can /e re oved for the purposes of test$ repair$ refining$reconditioning or carrying out any other operation necessary for the anufactureof final products or for anufacture of inter ediate products necessary for theanufacture of final products. The inputs or the partially processed inputs afterthey are su/Fected to the re7uisite process are to /e /rought /ac* to the factory+ithin %-" days and are either to /e used in the anufacture of final product orre oved after pay ent of duty for ho e consu ption or for export under /ond.The inputs or partially processed inputs after they have /een su/Fected to there7uisite process and /rought /ac* to the factory$ can /e re oved +ithoutpay ent of duty to a unit in 0ree Trade one or to a %""# EOU or to a unit inElectronic 6ard+are Technology 5ar* or (oft +are Technology 5ar*s or supplied

to the United Nations or an International Organisation for their official use orsupply to proFects funded /y the $ on +hich exe ption of duty is availa/le undernotification no. %"-=& 2CE dated


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in the partially processed inputs. The adFust ent of differential a ount if any$after ta*ing into account of the a ount already de/ited +hile sending the inputsor partially processed inputs fro the factory$ is thereafter ade.

P'o!ed)'e )*de' *o$"#"!&$"o* *o.=7:;8@-CE d&$ed = . .8@ 1&s &0e*ded2.

This notification exe pts specified ite s$ if anufactured in a factory on Fo/ +or*/asis. The exe ption is availa/le to the Fo/ +or*er only if the supplier uses thereturned goods in the follo+ing anner

a. in or in relation to the anufacture of specified final products$ or

i, on +hich duty of excise is levia/le in +hole or in partH or

ii, for re oval to a unit in a 0ree Trade one or to a %""# EOU orto a unit in Electronic 6ard+are Technology 5ar* or (oft

Technology 5ar*s or for supply to the United Nations or anInternational Organisations for this official use or for supply to theproFects funded /y the $ on +hich exe ption of duty is availa/leunder notification no.%"-=& 2CE dated


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P'o!ed)'e )*de' *o$"#"!&$"o* *os. 8 ;


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!. Every anufacturer of excisa/le goods is re7uired )under Rule %4' of CentralExcise Rule %&'', to get registered +ith the Central Excise Depart ent /eforestarting production. The ((I ust file for registration +hen their turn over crossesRs. % Crore only. The application for the registration should /e su/ itted to the

Furisdictional Range (uperintendent of Central Excise. The Registration

Certificate +ill /e auto atically granted. If it is not granted +ithin !" days of thereceipt of the application it is dee ed to have /een granted. There is no fee forregistration and a factory or a unit is to /e registered once only. There is no needfor rene+al of the registration. The registration is applica/le only for the pre ises+here the anufacture is ta*ing place. A separate registration is re7uired foreach pre ise. In case a ne+ product is to /e anufactured$ the registrationcertification should /e got endorsed for the additional ite s.

E e0+$"o* #'o0 'eg"s$'&$"o*.

'. The re7uire ent of registration has /een exe pted for the follo+ing persons.

)Notification No.


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Notification No.-=. II.B e'e $ e SSI )*"$ &4&"ls CENVAT

Notification No.&="# of the nor al rate of duty

< (u/se7uent Clearances at the nor al rate of duty

4. A. The follo+ing clearances are excluded fro co putation of value ofclearances

Clearances of the specified goods +hich are used as inputs for furtheranufacture of specified goods +ithin the factory irrespective of the valueof clearances.

Clearances of excisa/le goods affixed +ith the /rand na e or trade na eof another person +ho is not eligi/le for availing the exe ption under theaforesaid notification. 6o+ever$ the clearances of goods affixed +ith the/rand na e or trade na e of another person 2 other than those +hich arein the nature of co ponents or parts of achinery or e7uip ent for use asoriginal e7uip ent in the anufacture of the said achinery$ goods/earing the /rand na e of :IC$ N(IC or a (tate ( all IndustriesCorporation or (tate :I8 or those goods anufactured in a factorylocated in a rural area are not eligi/le for the exe ption=concession froexcise duty irrespective of the value of clearances.

Clearances +hich are fully exe pt fro excise duty under any othernotification )other than those giving exe ption /ased on 7uantity or valueof clearances,.

8. The conditions for availing the aforesaid exe ption=concession fro exciseduty are as under -


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The aggregate value of clearances of all excisa/le goods for ho econsu ption /y a anufacturer fro one or ore factories or fro afactory /y one or ore anufacturers does not exceed rupees threehundred lacs in the preceding financial year.

The anufacturer does not avail of the credit of duty under the CEN:ATsche e upto an aggregate value of clearances of rupees one hundredlacs.

C. The thresholds of excise duty concessions under the aforesaid s all2scalesche es act as a ladder for ena/ling the s all units to gro+ and graduate into/igger units.

D. Units availing ((I exe ption are per itted to re ove specified goods to aplace outside the factory for getting any Fo/ +or* done on any specified goods+ithout pay ent of duty )Notification nu /er -!=&' and -'=&' Central Excisedated %%.'.&' as a ended,

8. HOB TO AVAIL CENVAT;CAPITAL GOODS CREDIT

The Cenvat sche e is a syste +here/y a anufacturer can avail of credit ofthe duties paid /y a anufacturer of his ra+ aterials$ inputs$ parts andco ponents or his capital goods to pay his o+n Central Excise Duty. This is

intended to ensure that no anufacturer is forced to pay duty on the duty portionof his product. 8riefly$ in order to avail the CEN:AT credit$ the goodsanufactured or produced have to pay duty. All inputs if used in the anufactureof the final product are eligi/le for Cenvat Pexcept high2speed diesel oil and otor spirit )petrol,Q. All capital goods actually used in the anufacture of the finalproducts are also eligi/le. All finished goods are eligi/le for the /enefit of Cenvatexcept atches. 6o+ever$ avail ent of Cenvat on capital goods +ill /e spreadover t+o years$ half in the first year. A anufacturer availing cenvat on capitalgoods ust not avail depreciation under the inco e tax act on the duty part ofthe cost of the capital goods.

&. An ((I +ho is to ta*e the /enefit of Cenvat sche e ust give a letter of C.Ex.and aintain the appropriate registers. 8efore availing cenvat$ the ((I ustphysically receive the goods under a duty paying docu ent or a proper invoiceissued /y a registered dealer. The ((I ust aintain an registers giving detailsof receipt and disposed of inputs capital goods and pay ent of duty /y credit.Registers. Once he has availed cenvat on a duty paying docu ent thedocu ents ust /e defaced so that it can not /e used again. These duty payingdocu ent already defaced and the record along +ith his o+n delivery docu ents


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ust /e sho+n to the Central Excise officers on de and. There is a provision forre oving ra+ aterials$ inputs or capital goods on +hich cenvat credit has /eenta*en out of the factory for further processing$ repairs or Fo/ +or*. Details of thecenvat sche e ay /e o/tained fro the local Central Excise officer. 5leasenote that +hen duty is /eing paid vide cenvat credit$ the credit accruing on goods

received after the last day of the onth in +hich duty is due to /e paid$ can not/e utili ed )C8EC s circular 'for those ((Is +ho are availing of CEN:AT credit.% challan fro the /an* should a creditentry /e ade in the 5;A. In case of stri*e of the /an*s or closure due tounforeseen circu stances the Co issioner +ill issue a trade notice per ittingthe ((I to send the pay ent /y che7ue /y registered post AD or specialessenger +ith the TR2> challans in 7uadruplicate duly filled in. Thesedocu ents are to /e sent to the Chief Accounts Officers of the Co issionerate+ith copy to the Range concerned. There ust a clear declaration that the ((Ihas sufficient /alance in their /an* account.

%!. In case pay ent is not ade /y the specified date interest is levi/le. Theinterest at present is


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(pecial excise duties ""!-"%4-

Cess on tea ""!-"!&!

Cess on cotton ""!-"!&&

Cess on 8idi ""!-"'%

Cess on (ugar ""!-"'

Cess on 5aper ""!-"'!>

Cess on Copra ""!-"!&

Cess on auto o/iles ""!-"'', under +hich the goods are classifia/le. 8* )a, Reference to the heading=su/2heading of the said (chedule or the

notification issued under rule - of the Central Excise Rules$ %&'' or(ection A of the Central Excise Act$ %&'' or (ection A of the CentralExcise Act$ %&'') % of %&'',$ as the case ay/e )under +hich the goodsare exe pted fro the +hole of the duty of excise levia/le thereon,.

)/, 3round of exe ption under the said heading=su/2heading or the saidnotification &. 5rocess of anufacture.

)(ignature of Applicant ,

Note. 5ortion of the 0or =(chedule that is not relevant to a particularanufacturer

9ay /e deleted.

(ee paragraphSTATEMENT SHOBING MONTHBISE DUTY PAYMENT FOR THE UARTER

ENDING .

Se'"&l No. I*4o"!e No. &*d d&$e N&0e o# $ e!o*s"g*ee

ECC No. o# !o*s"g*ee


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)%, )


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i. :alue indicated against (.No. )ix, and )x, shall correspond to theassessa/le value deter ined in invoice or as indicated in the declarationfiled or tariff value as the case ay /e.

ii. The rate of duty and the a ount of duty given against (.No. )xii, and )xiii,should /e indicated separately for each type of duties$ such as /asic duty$

additional duty$ cess etc.

CEN:AT

Ce*4&$ s! e0e.

The CEN:AT (C6E9E is a sche e designed to reduce the cascading effect ofindirect taxes on final products. This is a ore li/eral and extensive sche e thanthe erst+hile 9OD:AT (C6E9E +ith ost goods /rought +ithin its a /it and nodeclarations or statutory records prescri/ed 1R)les 9AA $o 9A 2 .

The (che e allo+s instant CEN:AT Credit to /e ta*en of duties such as ExciseDuty$ (ED$ ADE and C:D paid on inputs and capital goods received in a factoryfor the anufacture of any dutia/le final product )except atches,. This creditcan /e utilised to pay Excise duty on any final product=All ra+ aterials or inputsare covered except 6igh (peed. Diesel and 9otor (pirit 1R)le 9A(2 . (i ilarly$capital goods including pollution control e7uip ent$ co ponents$ spares$accessories$ oulds and dies and paints$ pac*aging aterial andgreases=coolants are eligi/le goods on +hich credit can /e availed 1R)le 9AA2 .

Credit can /e availed i ediately on receipt of eligi/le$ duty paid goods in thefactory. There is no need for the anufacturer to file any declaration or o/tainany per ission 1R)le 9AC2 . The anufacturer has to satisfy hi self that he hasco plied +ith the conditions prescri/ed in R)le 9AC .

In the case of Capital 3oods$ only "# of the duty paid on the goods can /eavailed off in a financial yearH the re aining can /e availed in the next financialyear provided the goods are still in use )except for spares and co ponents,R)le 9AC 1=2 . 0urther$ no depreciation should /e clai ed /y the anufacturer under (ec.!< of the Inco e Tax Act$ %&>% on that part of the value of theseCapital 3oods +hich is e7ual to the duty paid on the goods R)le 9AC 1:2 .

A anufacturer +ho anufactures only exe pted final products is not coveredunder this (che e. 6o+ever$ the (che e allo+s those +ho anufacture /othdutia/le and exe pted final products in the sa e factory to avail of its /enefitssu/Fect to certain conditions vi .$ aintenance of separate records in respect ofinputs used to anufacture exe pted products or pay ent of -# of the totalprice )excluding taxes, of the total price of the exe pted final products or in thecase of a fe+ specified ite s$ on reversal of the credit availed 1R)le 9AD2 .


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(i ilarly$ credit can /e availed on Capital 3oods if not used exclusively for theanufacture of exe pted final products.

The (che e also$ interalia$ provides the follo+ing facilities12

i. Re oval of inputs or capital goods as such on pay ent ofExcise duty as if such goods had /een anufactured in thefactory S Explanation to R)le 9A( 172 1b2

ii. Re oval of goods to Fo/2+or*ers for processing$ testing$reconditioning or any other purpose provided that the goodsare received /ac* +ithin %-" days or are re oved fro thepre ises of the Fo/ +or*er if per itted /y the Co issionerof Cen.Excise R)le 9AC 1 2 5 1@2 H

iii. Refund of credit accu ulated due to export under /ond of

the final products is per issi/le R)le 9AC 192 H iv. Unutilised CEN:AT Credit can /e transferred on account ofshifting of a factory to another site or due to change ino+nership /y sale$ erger$ a alga ation$ lease or transferto a Foint venture +herein lia/ilities are also transferredH and

v. A special dispensation has /een ade in the case of goodsanufactured in specified areas of the North East 1R)le9A 2 .

No statutory records have to /e aintained or duty paying docu ents su/ ittedto the depart ent on a periodic /asis.

The anufacturer should ta*e reasona/le steps to ensure that the appropriateduty has /een paid on the inputs or capital goods on +hich credit is availed$ asindicated in the docu ents acco panying the goods. These docu ents areprescri/ed in R)le 9AE . (i ilarly$ the anufacturer shall aintain his o+nrecords regarding receipt$ disposal$ consu ption and inventory of the goodscontaining relevant infor ation. The /urden of proof regarding ad issi/ility of theCEN:AT Credit lies upon the anufacturer R)le 9AE 1=2 5 1 2 .

If CEN:AT Credit is ta*en or utilised +rongly$ the sa e$ along +ith interest$ +ill

/e recovered and$ if the sa e involves fraud$ +ilful is2state ent$ collusion$suppression of facts or contravention of the provisions of the Act or the Rules$andatory penalty and interest +ill also /e attracted R)le 9AH 'e&d %"$Se!.77A. 77AA3 77A( &*d 77AC .

A si ple onthly return in a prescri/ed for at has to /e filed /y the %" th of theonth follo+ing the onth during +hich credit +as availed. 9anufacturersavailing of the ( all (cale exe ptions$ /ased on value or 7uantity of clearances


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during a financial year$ need to file this return only on a 7uarterly /asis R)le9AE 1:2 .

Dealer of Excisa/le 3oods

A dealer of excisa/le goods +ho is registered under Rule %4' of the CentralExcise Rules$ %&'' and on the strength of +hose invoice 9odvat credit can /eta*en$ is called a registered dealer. The registration under Rule %4' is +ithregard to a pre ises. Any of the follo+ing categories +ould constitute aregistered dealer

%. depot of a anufacturerH or the pre ises of the consign ent agentof the anufacturer or any other pre ises fro +here the goodsare sold /y or on /ehalf of the anufacturerH


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or*ing 5artner or 9anaging Director or the Co pany (ecretary /efore /eingused.

The serial nu /ers of the invoices to /e used are to /e inti ated to the Furisdictional Assistant Co issioner of Central Excise. The registered person

ust o/tain the dated ac*no+ledge ent of such inti ation.

The registrant is per itted to use records and invoices generated throughco puter. hen the invoices generated through co puter$ the serial nu /ersli*ely to /e used in the forth2co ing 7uarter$ are to /e inti ated to the

Furisdictional Assistant Co issioner of Central Excise. In the event of theseserial nu /ers /eing exhausted$ a revised inti ation is to /e sent.

The details of soft+are used including a for at used for infor ation$ is alsore7uired to /e sent to the Assistant Co issioner.

The registered person is to preserve all the statutory records for a period of fiveyears and is duty /ound to produce the sa e$ on de and$ /y the Central Exciseofficers.

The registered person is to su/ it the invoices of goods received /y hi $ +ithin4 days of close of each onth$ to the Central Excise officer$ for deface ent.

Types of Excise Dutieshere are three types of !entral Excise duties collected in?ndia namely

2* Basic Excise Duty

his is the duty charged under section " of the!entral Excises and Salt


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"* Special Excise Duty


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@et cost of H +4#* ; +##c .alue


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4D


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a&ailed*

Boods used only for manufacture of dutiable products where credit can be a&ailed*

Boods being used for both the dutiable products as well as exempted products but the

uantum of use at the stage of receipt of inputs is not ascertainable* ?n such case creditshould be a&ailed and at the time of remo&al, but re&ersal of amount e ual to 8% of the&alue of exempted final product, is admissible in terms of rule ; C"D CbD

Boods being used for both the dutiable products as well as the exempted products, but theuantum of use is ascertainable at the time of receipt* ?n such case, the credit should bea&ailed only for the inputs, used for dutiable final product* 9owe&er the inputs should beseparately recorded, stored and issued*

ransfer of !E@.< !)E ?

)ule 2# lays down the following pro&isons for transfer of !en&at !redit2D ?f a manufacturer of the final products shifts his factory to another site or the factory istransferred on account of change in ownership or on account of merger, amalgamation,lease or transfer of the factory to a joint &enture with the specific pro&ision for transfer of liabilities of such factory, then the manufacturer shall be allowed to transfer the !en&atcredit lying unutiliNed in his accounts to such transferred sold mreged, leased oramalgamated factory+D ?f a pro&ider of output ser&ice shifts or transfers his business on account of change inownership or on account of of merger, amalgamation, lease or transfer of the business toa joint &enture with the specific pro&ision for transfer of liabilities of such business, thenthe pro&ider of output ser&ice shall be allowed to transfer the !en&at credit lyingunutiliNed in his accounts to such transferred, sold to such transferred sold mreged, leasedor amalgamated factory"D he transfer of the !en&at credit shall be allowed only if the stock of inputs as such orin process or the capital goods is also transferred along with the factory or business

premises to the new site or ownership and the input or capital goods on which credit has been a&ailed of are duly accounted for to the satisfaction of the eputy !ommissioner of!entral Excise or as the case may be, the


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respect of which any contra&ention has been committed or ten thousand rupees whiche&er is greater*

+D ?n a case where the !E@.< credit in respect of input or capital goods has been takenor utiliNed wrongly on account of fraud, wilful mis1statement, collusion or supression of

facts or contra&ention of any of the pro&ision of the Excise