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CHAPTER V
MANUFACTURED GOODS, OTHER THAN SALT

A. GENERAL

43. Notice of manufacture to be given.- 

(1) Every manufacturer who intends to manufacture excisable goods for the first time shall, before commencing operations, give notice in writing to the Commissioner and shall specify therein the nature of the raw materials which he intends to use.

(2) Every manufacturer of excisable goods shall, before stopping or resuming the production of such goods, give notice in writing to the Commissioner of his intention to stop or resume the production of such goods.

(3) Whenever there is any change in the nature of any raw material used, the manufacturer shall, before making any change, give notice in writing to the Commissioner, specifying the new material to be used.

44. Commissioner may require manufacturer to make prior declaration of factory premises and equipment.- 

(1) Every manufacturer, who is required by the Commissioner so to do, shall, before beginning to manufacture, excisable goods other than salt, liable to duty on manufacture, declare in the proper Form all premises, pipes and vessels intended to be used by him for his business specifying the purpose for which each room, place, pipe and vessel, is to be used and the mark by which it is to be distinguished and stating the quantity of goods which his factory is capable of producing.

(2) The manufacturer shall sign the declaration and deliver it to the proper officer.

(3) Plans of the premises, rooms, places, pipes and vessels to be used by the manufacturer which are referred to in such declaration, shall be submitted to the proper officer if required and no manufacture shall be permitted unless such officer has given a certificate of approval.
Form D-2(8KB)

45. Alteration or movement of factory equipment.- 

(1) A manufacturer who has made a declaration as required in rule 44, may, on giving to the proper officer two days" previous notice in writing of his intention, specifying the vessel, or pipe intended to be altered, moved or added, alter or move any declared vessel, or pipe, or add a new vessel or pipe.

(2) Every such vessel or pipe shall be duly declared.

46. Marking of premises and equipment.- 

Every person making a declaration under rule 44 shall, to the satisfaction of the proper officer, paint and keep in a large and distinct character upon some convenient and conspicuous part of the outside of such building, place or vessel, the distinguishing mark shown in such declaration, and from time to time and when occasion requires or when requested by the Commissioner shall renew the mark so long as the declaration thereof remains uncancelled, so that each letter or number so painted may be easily and distinctly observed and known by an officer, and whenever any such person uses or employs, in any declared building or place, any fixed pipe, he shall, when required by the Commissioner by a written notice, paint and keep painted every such pipe throughout its whole length and over its whole exterior surface with distinct oil colours to the satisfaction of the proper officer. And all pipes or parts of pipes used for the same purpose shall be painted in the same colour.

47. Goods may be stored without payment of duty.-

(1) A manufacturer shall provide a store-room or other place of storage at his premises for depositing goods made on the same premises without payment of duty:

     Provided that, where the manufacturer undertakes to pay duty on all such goods and clear them immediately on completion of manufacture, the Commissioner may exempt him from providing such store-room or other place of storage.

(2) No duty-paid goods and no goods other than excisable goods made in the factory shall be deposited in such store-room or place.

(2A) Notwithstanding anything contained in sub-rule (2), the Board may, subject to such conditions and limitations as may be laid down by it, permit duty paid ice-cream falling under Heading No. 21.05 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) to be deposited in store room or other place of storage.

(3) Every such store-room or place shall be declared by the manufacturer and approved by the Commissioner.

(3A) Where the provisions of Chapter VII of these rules have been extended by the Central Government by notification in the Official Gazette to any excisable goods, every such store-room or other place of storage in the premises of a factory manufacturing such goods shall be  deemed to be a warehouse registered under rule 140.

(4) Omitted.

(5) Notwithstanding anything contained in sub-rule (1), the Central Board of Excise and Customs may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer where the goods are made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty subject to such conditions as it may specify; and the provisions of sub-rules (2) to (4) shall apply to such place of storage as they apply for storage of goods in a store-room or other place of storage within the premises of the manufacturer, where the goods are made.
Form E.B.4(Matches)(7KB)
Form R.G.1(8KB)

48. Omitted.
49. Payment of duty on fortnightly-basis on removal of goods from the factory premises or from an approved place of removal. - 

(1) (a) Every manufacturer, other than a manufacturer who is availing of the exemption under a notification based on value of clearances in a financial year, shall discharge his duty liability in respect of clearances of excisable goods from the place or premises specified under rule 9 or from a store room or other place of storage approved by the Commissioner under rule 47 made:-

  1. during the first fortnight of the month, by the twentieth day of that month,

  2. during the second fortnight of the month, other than the month of March, by the fifth day of the succeeding month; and

  3. during the second fortnight of March, by the 31st day of the said March

(aa)    Every manufacturer availing of the exemption under a notification based on the value of clearances in a financial year shall discharge his duty liability in respect of clearances made during a calendar month, by the 15th day of the succeeding month.

Explanation - For removal of doubts, it is hereby clarified that the duty liability under clause (a) or clause (aa) shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the date specified.

(b) The manufacturer shall discharge his duty liability by debiting account current or utilising CENVAT credit in the following manner, namely: -

    (i) the manufacturer shall assess the duty due on the excisable goods intended to be removed, for each consignment and shall enter the particulars of such consignments in daily stock account maintained under rule 53.

    (ii) the manufacturer shall indicate on each gate pass or invoice, issued under rule 52 or 52A, as the case may be, the amount of duty payable;

    (iii) at the end of each fortnight, the manufacturer shall determine the total amount of excise duty payable on the excisable goods removed during the fortnight, and he shall discharge the total duty liability so payable by making debit entry in the account current or by utilising CENVAT credit.

(c) The duty of excise shall be deemed to have been paid on excisable goods for the purpose of these rules, and the credit of such duty, as may be prescribed under any rule, will be permissible. 

(d) If the manufacturer fails to pay the amount of duty payable by the due date, he shall be liable to pay the outstanding amount along with interest at the rate of twenty-four  percent per anum on the outstanding amount, for the period starting with the first day after due date of actual payment of the outstanding amount

(e) If the manufacturer defaults on account of-

    (i) full payment of any one installment is discharged beyond a period of thirty days from the date on which the installment was due in a financial year, or

    (ii) the due date on which full payment of installments is to be made is violated for the third  time in a financial year, whether in succession or otherwise, then the manufacturer shall forfeit the facility to pay the dues in installments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard or till such date on which all dues are paid, whichever is later and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account current referred to in clause (b) and in the event of any failure, it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as  provided in these rules shall follow.".

(1A) The manufacturer shall, on demand, pay the duty leviable on any goods which are not accounted for in the manner specifically provided in these rules, or which are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during handling or storage in such store-room or other approved premises:

Provided that the proper officer may not demand duty due on any goods claimed by the manufacturer as unfit for consumption or for marketing subject to such conditions as may be imposed by the Commissioner by order in writing.

(2) Notwithstanding anything contained in sub-rule (1), excisable goods made in a factory to which provisions of Chapter VII of these rules have been extended by the Central Government by notification in the Official Gazette, may be removed from the factory in which they are made to any warehouse registered under rule 140 for the storage of such goods and situated outside the registered premises of the factory and subject to such exemptions, limitations and conditions as may, from time to time, be specified in this behalf by the Central Government.

(3) Notwithstanding anything contained in sub-rule (1), the Central Government may, under circumstances of exceptional nature, allow, by notification in the Official Gazette, any excisable goods to be removed from the factory in which they are produced without payment of, or only on part payment of, duty leviable thereon subject to such conditions and limitations (including payment of interest on the balance amount of duty) as may, from time to time, be specified by the Central Government. The manufacturer of such excisable goods shall execute a bond in the proper Form with such surety or security as the Commissioner may approve.

 Explanation.-For the purposes of this rule, excisable goods made in a factory and consumed or utilised-

  • (i) as such or after subjection to any process or processes; or
  • (ii) for the manufacture of any other commodity,

whether in a continuous process or otherwise, in such factory or place or premises specified under rule 9 or store-room or other place of storage approved by the Commissioner under rule 47, shall be deemed to have been issued out of, or removed from such factory, place, premises, store-room or other place of storage, as the case may be, immediately before such consumption or utilisation.
Form:B.14(Gen.sur.)(11KB)
Form:D.D.2(10KB)

49A. Collection of duty leviable on cellulosic spun yarn and cotton yarn along with the duty on cotton fabrics.- 

Where a manufacturer,-

  • (i) who manufactures cellulosic spun yam not containing synthetic staple fibre falling within Chapter 55 and cotton yarn not containing synthetic staple fibre falling within Chapter 52 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or both, and uses the whole or part of the yarn so manufactured in the manufacture of cotton fabrics in his own factory; or
  • (ii) who being a composite mill, brings such yarn under rule 96E or rule 96EE, as the case may be, from outside for the purpose of manufacture of cotton fabrics in his own factory,

makes an application to the Commissioner in this behalf, shall, on such application being granted by the Commissioner, pay the duty leviable on such cellulosic spun yarn and such cotton yarn along with the duty on such cotton fabrics in the manner prescribed in rule 52, subject to the following conditions, namely:-

  • (1) when the cotton fabrics are cleared grey (unprocessed), the yarn duty payable shall be-
    • (a) the appropriate duty payable on such cellulosic spun yarn or cotton yarn, or both, as the case may be; plus
    • (b) one and a half per cent of the duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty;
  • (2) when the cotton fabrics are cleared after processing, the yarn duty payable shall be-
    • (a) the appropriate duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be; plus
    • (b) three per cent of the duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty:
         Provided that where the cotton fabrics are cleared without payment of duty leviable thereon for processing under rule 96D, the duty payable on such cellulosic spun yarn and cotton yarn plus the interest at the rate of three per cent thereof may be paid at the time of clearance of such fabrics after processing from the composite mill or the factory which processes such fabrics, as the case may be.

Explanation.-For the purposes of this rule, "Composite mill" means a manufacturer who is engaged in spinning of cotton yarn or weaving or processing of cotton fabrics with the aid of power and has a proprietary interest in at least two of such manufacturing activities.

50. Omitted
51. Packing and weighment of goods.- 

Unless specially exempted by the Commissioner by order, for reasons to be recorded in writing, every manufacturer shall, as soon as practicable, after any excisable goods are packed and weighed in the factory or otherwise made ready for removal from the factory-

  • (i) mark on each wholesale package, in a clearly legible manner-
    • (a) batch No. (lot No.), if any, to which the goods pertain;
    • (b) a running Serial No. which will commence from the 1st of January of every year;
    • (c) the number of retail packages contained in each wholesale package, and the quantity of goods contained in
           each  retail package;
    • (d) a distinguishing letter or letters or a word or words or a combination thereof, denoting the kind and quality of
           the goods:

             Provided that where there is any doubt or difficulty regarding the manner of marking any of the particulars at (a) to (d) on a wholesale package, the same may be done in the manner approved by the concerned Assistant Commissioner of Central Excise:

                               Provided further that the approval under the first proviso shall be subject to the modification, if any, that may be                     made by the Commissioner:

                              Provided also that where the goods cannot, by reason of their nature or for any special reason, be enclosed in                    packages, they shall themselves be marked and distinguished or, if they cannot be marked, shall be otherwise                    distinguished in such manner as the Commissioner may require;

  • (ii) deposit the goods in an approved  store-room unless they are intended to be cleared on payment of duty immediately after completion of manufacture:

         Provided that where the goods are to be converted into some other form of manufactured product and cannot, therefore, or for any other sufficient reason, be deposited in a store-room, they shall be disposed of in such manner as the Commissioner may require.

Explanation.-For the purpose of this rule, in case of a doubt regarding what is a wholesale package or, as the case may be, a retail package, the same shall be determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having regard to the normal trade practice for clearing such goods.

51A. Removal of goods after payment of duty.- 

Except as otherwise expressly provided in these rules, no duty-paid goods shall be allowed to enter, or be retained in, any part or premises of a factory:

      Provided that the Commissioner or the Board may, by a general or special order, and subject to such conditions and limitations as may be laid down in such order, permit duty-paid goods to enter, or to be retained in, any part or premises of a factory.

52. Clearance on payment of duty.- 

When the manufacturer desires to remove goods on payment of duty, either from the place or premises specified under rule 9 or from a store-room or other place of storage approved by the Commissioner under rule 47, he shall make application in triplicate (unless otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the officer at least twelve hours (or such other period as may be elsewhere prescribed or as the Commissioner may in any particular case require or allow) before it is intended to remove the goods. The officer shall, thereupon, assess the amount of duty due on the goods shall allow the goods to be cleared:

Provided that where removals from a factory are frequent and the manufacturer maintains a sufficient credit balance in his account-current maintained under rule 9 for payment of duty, the Assistant Commissioner of Central Excise or Deputy Collector of Central Excise may, on a request by the manufacturer, permit, by an order in writing, removal of goods on presentation of a gate-pass as prescribed under rule 52A, subject to the observance of such procedure as may be prescribed in this regard by the Commissioner.
Form:A.R.1(0KB)

52A. Goods to be delivered on an invoice.- 

(1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent:

        Provided that when the excisable goods, other than those to which the provisions of Chapter VII-A apply, are removed on payment of duty such invoice shall be required to be countersigned by the proper officer.

       Explanation.-In this rule, and in any other rule, where the term invoice or gatepass, as the case may be, is used it shall mean-

  • (i) assessee"s own document such as invoice, challans, advice or other document of similar nature generally used for sale or removal of excisable goods and which shall contain all the particulars as required under the said Act or in these rules;or
  • (ii) such other form as the Central Board of Excise and Customs may notify.
(2) The invoice shall be made out in triplicate. "The original copy shall be for the buyer, the duplicate for the transporter, and the triplicate shall be retained by the manufacturer. The manufacturer may make extra copies of the invoice for his own use and each such extra copy shall be clearly marked with its sequential number. The duplicate copy shall be produced by the transporter on demand by any Officer while the goods are en route to such destination from the factory:

     Provided that in respect of removal of excisable goods consumed within the factory for manufacture of other goods in a continuous process, the manufacturer may make out a single invoice, at the end of the day:

     Provided further that for any excisable goods, other than those to which the provisions of Chapter VII-A apply, the invoice shall be presented to the proper officer for counter-signature at least one hour before the actual removal of goods from the factory. After counter-signature the proper officer shall return all the copies of the invoice to the manufacturer except the triplicate required for his record.

(3) The copies of the invoices shall be marked at the top in bold capital letters in the following manner, namely:-

  • (i) the original copy shall be marked as ORIGINAL FOR BUYER;
  • (ii) the duplicate copy shall be marked as DUPLICATE FOR TRANSPORTER.
  • (iii) the triplicate copy shall be marked as TRIPLICATE FOR ASSESSEE.
(4) If all the packages comprising a consignment are despatched in one lot at any one time, only one invoice shall be made out in respect of the consignment. If, however, a consignment is split up into two or more lots each of which is despatched separately either on the same day or on different days, a separate invoice shall be made out in respect of each such lot. In case a consignment is loaded on more than one vehicle, vessel, pack animal or other means of conveyance which do not travel together but separately or at intervals, a separate invoice shall be made out in respect of each vehicle, vessel, pack animal or other conveyance.

(5) Invoice shall be maintained in two sets-
            (i) one for clearance for home consumption; and
            (ii) the other for clearances for export.

(6) Each invoice shall bear a printed serial running for the whole financial year beginning on the 1st April of each year. Only one invoice book of each type shall be used by a factory for removal of excisable goods at any one time unless otherwise specially permitted by the Commissioner in writing.

(7) Each foil of the invoice book shall be authenticated by the owner or working partner or Managing Director/Company Secretary, as the case may be, before being brought into use by the manufacturer. The serial number of the invoice, before being brought into use, shall be intimated to the Assistant Commissioner of Central Excise or Deputy Collector of Central Excise and dated acknowledgment of receipt of such intimation shall be retained by the manufacturer:

   Provided that the Commissioner may, by a general or special order, exempt an assessee or class of assessees from pre-authentication of each foil of invoice book and from intimating the serial number of the invoice.

52AA. Procedure for issuing invoices under rule 57AE.-

(1) Every person, who issues invoices under rule 57AE shall get registered under rule 174

(2) Every person registered for the purposes of this rule (hereafter in this section referred to as the registered person) shall maintain a stock account in Form R.G.23D.

(3) The registered person shall maintain the R.G.23D register and at the end of the day enter therein receipt and issue of excisable goods, and shall-

    (a) at the time of making any entry, insert the date when the entry is made;

    (b) correctly keep such book, account or register in the manner required under these rules and shall not cancel, obliterate, or alter any entry therein, except for correction of any errors;

    (c) keep the book, account or register ready for inspection by the officers, and shall permit any officer to inspect it and make such minute therein or take any extract there from, as such officer may think fit;

    (d) at any time, if demanded by the officer, send the records referred to in the clause (c) to the proper officer.

(4) The registered person shall issue an invoice containing such details as may be specified by the Central Board of Excise and Customs or the Commissioner.

(5)     (a) The invoice shall be made out in quadruplicate. The copies of the invoice shall be marked at the top in bold capital letters in the following manner, namely:-

        (i) the original copy shall be marked as "ORIGINAL FOR BUYER" and that copy shall be given to the buyer;

        (ii) the duplicate copy shall be marked as "DUPLICATE FOR TRANSPORTER";

        (iii) the triplicate copy shall be marked as "TRIPLICATE FOR CENTRAL EXCISE" and that copy shall be sent to the proper officer;

        (iv) the quadruplicate copy shall be marked as "QUADRUPLICATE FOR REGISTERED PERSON" and that copy shall be retained by the registered person for his record.

    (b) The copies of the invoices issued by a first stage dealer and a second stage dealer shall also be marked at the top in bold capital letters as "FIRST STAGE DEALER" and "SECOND STAGE DEALER" respectively.

    (c) The invoice issued by a first stage dealer or second stage dealer in the case of imported goods and by a second stage dealer in the case of other goods, shall be duly authenticated by the proper officer.

(6)     (i) Each invoice shall bear a printed serial number running for the whole financial year beginning on the 1st April of each year.

    (ii) The registered person shall use only one invoice book at any one time unless otherwise permitted by the Commissioner in writing.

(7)     (i) Each foil of the invoice book shall be authenticated by the owner or the working partner or the Managing Director or the Company Secretary, before being used by the registered person.

    (ii) The registered person shall intimate the serial number of the invoice before being used to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise as the case may be, and the dated acknowledgement of receipt of such intimation shall be retained by the said registered person.

(8)     (i) It shall be permissible to use records and invoices generated through a computer.

    (ii) When the invoice is generated through a computer, the registered person shall intimate the serial number likely to be used in the forthcoming quarter and as soon as the same is exhausted, a revised intimation shall be sent.

    (iii) The registered person shall also send details of the software used including the format used for information of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise as the case may be.

(9)     (i) The registered person shall issue only one invoice in respect of the consignment if all the packages comprising the said consignment are dispatched in one lot at any one time.

    (ii) If a consignment is split up into two or more lots and each such consignment is dispatched separately either on the same day or on different days, a separate invoice shall be made out in respect of each lot.

    (iii) Separate invoice shall be issued in case where the consignment is loaded on more than one vehicle, vessel, pack animal or other means of conveyance which do not travel together but travel separately or at intervals.

(10) The registered person shall, within seven days after the close of each month, submit to the Range Superintendent, a monthly return and other documents as the Central Board of Excise and Customs or the Commissioner may specify, for the purpose of verification by the said Range Superintendent.

(11) The registered person shall preserve documents specified under this rule for a period of five years and shall, on demand, produce the same to the Officer.

(12) The registered person shall, within seven days of close of each month, submit duplicate copies of the invoices issued under rule 52A or 57AE to the Superintendent of Central Excise with whom such person is registered, and-

    (a) where the entire quantity shown in the invoice has been sold, deface the same with remarks "CENVAT CREDIT ALLOWED - NOT TO BE USED AGAIN"; and

    (b) where the entire quantity has not been sold, the Range Superintendent shall endorse on the back of the invoice, details relating to the quantity received, quantity issued, total amount of duty available as input stage credit (hereafter referred to as the said duty), amount of the said duty for which invoices have been issued, and the balance quantity and the balance amount of the said duty available for issuing invoices).

52B. Omitted.
53. Daily stock account.- 
(1) Every manufacturer shall maintain a stock account, and shall enter in such account daily-
  • (a) description of goods,
  • (b) opening balance,
  • (c) quantity manufactured,
  • (d) quantity deposited in the store-room, or other place of storage approved by the Commissioner under rule 47,
  • (e) quantity and value, of goods removed on which duty is required to be paid from such store-room or other place of storage or from the place or premises specified under rule 9,
  • (f) quantity and value of goods delivered from the factory without payment of duty for export or other purposes, and
  • (g) the rate of duty and the amount of such duty paid or payable, as the case may be:
          Provided that a manufacturer who furnishes a declaration in the Form annexed hereto may be exempted by the Commissioner from making "nil" entries in the above account on days on which there is no production, receipt in store-room, or clearance of excisable goods:

         Provided further that the Chief Commissioner of Central Excise may allow by, general or special order, a manufacturer, to make entries in respect of such goods, in such manner, at such interval, and subject to such conditions and limitations, as may be specified in such order.

Declaration

The Commissioner of Central Excise---------having permitted me/us, in relaxation of the provisions of rule 53 of the Central Excise Rules, 1944, to make entries in the different openings of the stock account only on those dates when there is any transaction of the nature mentioned in the said rule in respect of the particular description/variety/size of packing of the excisable goods, I/we hereby solemnly declare that no such transaction has taken place on any date for which no entries are made in the stock account for the particular description/variety/size of packing of the goods. I/We hereby undertake to make regular daily entries in the said account in respect of each description/variety/size of packing of the goods in respect of each transaction mentioned in rule 53 of the said rules on the particular day.

                                                                                                                                        Signature of Registered person

      (2) The stock account maintained under sub-rule (1) shall, after being filled up, be preserved for a period of not less than five years and kept available for inspection by any officer.

53A. Omitted.
54. Monthly returns.-
Within ten days after the close of each month every manufacturer shall submit to the proper officer a monthly return in the proper Form showing the quantity of excisable goods manufactured during the month, the quantity (if any) used within the factory for the manufacture of another commodity, the quantity removed on payment of duty from the place or premises specified under rule 9 or from the store-room or other place of storage approved by the Commissioner under rule 47, the quantity removed for export without payment of duty and such other particulars as may be elsewhere prescribed or as  the Commissioner may, by general or special order, require, and, where so required by the Commissioner, by a written notice, shall submit a similar return in the proper Form showing all the other products manufactured in and issued from the factory during the same month.
Form:R.T.3(143KB)
Form:R.T.3(Modified)(11KB)
Form:R.T.4(12KB)
55. Omitted.
56. Taking of samples for excise purposes.-
(1) The manufacturer shall permit any officer to take samples of any manufactured or partly manufactured goods or of any intermediate or residual products resulting from the manufacture thereof, in his factory.

(2) The officer referred to in sub-rule (1) shall conduct the test from the samples taken under that sub-rule and communicate to the manufacturer the result of such test.

(3)        (a) Where the officer is of the opinion that the samples after completion of the test can be restored to the
                manufacturer, officer shall send a notice in writing to the manufacturer requesting him to collect the samples within
                such period as may be specified in the notice.

        (b) If the manufacturer fails to take delivery of the samples within the period specified in the notice referred to in clause (a),
     the samples shall be disposed of in such manner as the Commissioner of Central Excise may direct.

(4) Where a manufacturer is aggrieved by the result of the test, he may, within ninety days of the date on which the result of the test is received by him, request the Assistant Commissioner of Central Excise or the Deputy Commissioner of central Excise that the samples be re-tested.
56A. Omitted.
56AA. Omitted.
56B. Special procedure for removal of finished excisable or semi-finished goods for certain purposes.- 
The Commissioner may, by special order and subject to such conditions as may be specified by the Commissioner, permit a manufacturer to remove-

    (i) excisable goods which are in the nature of semi-finished goods, for carrying out certain manufacturing processes, or

    (ii) excisable goods for carrying out tests,

to some other premises of his or to the premises of another person and to bring back such goods to his factory, without payment of duty, or to some other registered premises of his or to the premises of another assessee and allow these goods to be removed on payment of duty or without payment of duty for export from such other registered premises of his or from the premises of such assessee to whom the goods have been sent:

Provided that this rule shall not apply to the goods known as "prototypes" which are sent out for trial or development test.
Form:D.D.2(10KB)

56C. Omitted
57. Omitted

"AA. CREDIT OF DUTY PAID ON EXCISABLE GOODS USED AS INPUTS OR CAPITAL GOODS

57AA. Definitions.-
For the purpose of this section,-

(a) "capital goods" means-

     (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Central Excise Tariff Act, 1985;

     (ii) components, spares and accessories of the goods specified at (i) above;

     (iii) moulds and dies;

     (iv) refractories and refractory materials;

     (v) tubes and pipes and fittings thereof, used in the factory; and

     (vi) pollution control equipment, used in the factory of the manufacturer of the final products;

     (vii) storage tank.

Explanation. - For removal of doubts, it is hereby clarified that "capital goods" do not include any equipment or appliances used in an office.

(b) "exempted goods" means goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty;

(c) "final products" means excisable goods manufactured or produced from inputs, except matches;

(d) "input" means all goods, except high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not, and includes accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production, and also includes lubricating oils, greases, cutting oils and coolants.

Explanation 1.-  The high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever.

Explanation 2. - Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer.

(e) "manufacturer" or "producer" in respect of goods falling under Chapter 62 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) shall include a person who is liable to pay the duty of excise leviable on such goods under rule 7AA.

57AB. CENVAT credit. - 

(1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of ,-

  1. the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as the said First Schedule), leviable under the Act;
  2. the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985, leviable under the Act;
  3. the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act,1978;
  4. the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957;
  5. the National Calamity Contingent duty leviable under clause 129 of the Finance Bill, 2001,which clause has, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931, the force of law; and
  6. the additional duty leviable under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv) and (v) above,

paid on any inputs or capital goods received in the factory on or after the first day of March, 2001, including, the said duties paid on any inputs or capital goods used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 214/86- Central Excise, dated the 25th March, 1986, published in the Gazette of India vide number GSR 547(E), dated the 25th March, 1986, and received by the manufacturer for use in or in relation to the manufacture of final products, on or after the first day of March, 2001.

Explanation.- For removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975 on goods falling under heading No. 98.01 of the First Schedule to the said Customs Tariff Act.

(1A) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods cease to be exempted goods or any goods become excisable.

(1B) The CENVAT credit may be utilized for payment of any duty of excise on any final products manufactured by the manufacturer or for payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed, or such capital goods are removed as such.

Provided that while paying duty in the manner specified under sub-rule (1) of rule 49 or sub-rule (1) of rule 173G, as the case may be, the CENVAT credit shall be utilised only to the extent such credit is available on the fifteenth day of a month for payment of duty relating to the first fortnight of the month, and the last day of a month for payment of duty relating to the second fortnight of the month or in case of a manufacturer availing exemption by notification based on value of clearances in a financial year, for payment of duty relating to the entire month.";

(1C) When inputs or capital goods, on which credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under section 4 of the said Central Excise Act, and such removal shall be made under the cover of an invoice referred to in rule 52A.

(1D) The amount paid under sub-rule (1C) shall be eligible as credit as if it was a duty paid by the person who removed such goods under sub-rule (1C).

(2) Notwithstanding anything contained in sub-rule (1)-

     (a) credit of duty in respect of inputs or capital goods produced or manufactured

          (i) in a free trade zone and used in the manufacture of the final products in any other place in  India; or

          (ii) by a hundred per cent export-oriented undertaking or by a unit in an Electronic Hardware Technology Park or Software Technology Parks and used in the manufacture of the final products in any place in India, shall be restricted to the extent which is equal to the additional duty leviable on like goods under section 3 of the Customs Tariff Act, 1975 paid on such inputs;

     (b) credit in respect of-

          (i) the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978);

          (ii) the additional duty of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and

          (iii) the additional duty under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i) and (ii) above
shall be utilized only towards payment of duty of excise leviable under the said Additional duties of Excise (Textiles and Textile Articles) Act, or under the said Additional Duties of Excise (Goods of special Importance) Act, on any final products manufactured by the manufacturer or for payment of such duty as inputs themselves if such inputs are removed as such or after being partially processed

     (c) CENVAT credit of the duty paid on the inputs shall not be allowed in respect of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02 of the said First Schedule, manufactured by an independent texturiser, that is to say, a manufacturer engaged in  manufacture of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02, who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yarn of polyesters falling under sub-heading No. 5402.42 of the said First Schedule.

     (d) credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively of the First Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) shall be allowed to the extent of thirty rupees per square metre.

     (e) credit in respect of-

          (i) the National Calamity Contingent duty leviable under clause 129 of the Finance Bill, 2001; and

          (ii) the additional duty under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clause (i) above

shall be utilized only towards payment of National Calamity Contingent duty leviable under clause 129 of the Finance Bill, 2001 on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves if such inputs are removed as such or after being partially processed.

Explanation. - Where the provisions of any other rule or notification provide for grant of partial or full exemption on condition of or  non-availability of credit of duty paid on any input or capital goods, the provisions of such other rule or notification shall prevail over the provisions of the rules made under this section.

57AC. Conditions for allowing CENVAT credit.-
(1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer.

Provided that in respect of final products falling under Chapter 62 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), CENVAT credit of the duty paid on inputs may be taken immediately on receipt of such inputs in the registered premises of the person who gets such final products manufactured on his account on job work subject to the condition that such inputs are used in the manufacture of such final products by the job worker.

(2)     (a) The CENVAT credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial year.

     (b) The balance of CENVAT credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the factory of the manufacturer, provided that the capital goods (other than components, spares and accessories, refractories and refractory materials and goods falling under heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Central Excise Act) are still in the possession and use of the manufacturer of final products in such subsequent years.

     (c) CENVAT credit may also be taken in respect of such capital goods as have been received in the factory, but have not been installed, before the 1st day of April, 2000 subject to the condition that during the financial year 2000-2001, the credit shall be taken for an amount not exceeding fifty per cent. of the duty paid on such capital goods.

Illustration.- A manufacturer received machinery on April 16, 2000 in his factory. CENVAT of two lakh rupees is paid on this machinery. The manufacturer can take credit upto a maximum of one lakh rupees in the financial year 2000-2001, and the balance in subsequent years.

(3) The CENVAT credit in respect of duty paid on the capital goods shall be allowed to a manufacturer even if the capital goods are acquired by the manufacturer on lease, hire purchase or loan agreement, from a financing company.

(4) The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer claims as depreciation under section 32 of the Income-tax Act, 1961 (43 of 1961).

(5)     (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning or any other purpose, and it is established from the records, challans or memos or any other document produced by the assessee availing the CENVAT credit that the goods are received back in the factory within 180 days of their being sent to a job worker. If the inputs or the capital goods are not received back within 180 days, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the CENVAT credit or otherwise. However, the manufacturer can take the CENVAT credit again when the inputs or capital goods are received back in his factory.

     (b) CENVAT credit shall also be allowed in respect of jigs, fixtures, moulds and dies sent by a manufacturer of final products to a job worker for the production of goods on his behalf and according to his specifications.

(6) The Commissioner of Central Excise having jurisdiction over the factory of the manufacturer of the final products who has sent the inputs or partially processed inputs outside his factory to a job-worker may, by an order, which shall be valid for a financial year, in respect of removal of such inputs or partially processed inputs, and subject to such conditions as he may impose in the interest of revenue including the manner in which duty, if leviable, is to be paid, allow finished goods to be cleared from the premises of the job-worker.

(7) Where any inputs are used in the final products which are cleared for export under bond or used in the intermediate products cleared for export, the CENVAT credit in respect of the inputs so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final products cleared for home consumption or for export on payment of duty and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the Official Gazette. No refund of credit shall, however, be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims a rebate of duty under rule 12, in respect of such duty.

57AD. Obligation of manufacturer of dutiable and exempted goods.-
(1) CENVAT credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2).

(2)Where a manufacturer avails of CENVAT credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take CENVAT credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. The manufacturer, opting not to maintain separate accounts shall follow either of the following conditions, as applicable to him, namely:-

     (a) if the exempted goods are,-

          (i) final products falling under Chapters 50 to 63 of the Schedule to the Central Excise Tariff Act, 1985 ;

          (ii) tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40;

          (iii) black and white television sets, falling within Chapter 85;

          (iv) newsprint, in rolls or sheets, falling within Chapter heading No.48.01, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in or in relation to the manufacture of such final products at the time of their clearance from the factory, or

     (b) if the exempted goods are other than those described in clause (a) above, the manufacturer shall pay an amount equal to eight per cent. of the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at the time of their clearance from the factory.

Explanation.- The amount mentioned in (a) and (b) above shall be paid by the manufacturer by debiting the CENVAT credit or otherwise.

(3) No credit of the specified duty shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods (other than final products which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year).

(4) The provisions of sub- rule (1), sub-rule (2) and sub-rule (3) shall not be applicable in case the exempted goods are either,-

     (i) cleared to a unit in a free trade zone; or

     (ii) cleared to a hundred per cent. Export-oriented undertaking; or

     (iii) cleared to a unit in an Electronic Hardware Technology Park or Software Technology Parks; or

     (iv) supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No.108/95-Central Excises, dated 28th August, 1995; or

     (v) cleared for export under bond in terms of the provisions of rule 13.

57AE. Documents and accounts.-
(1) The CENVAT credit shall be taken by the manufacturer on the basis of any of the following documents, namely :-

(a) an invoice issued by a manufacturer of inputs or capital goods under rule 52A or 52AA or rule 100E from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer;

(b) a bill of entry;

(c) an invoice issued by a first stage dealer of excisable goods under rule 52AA;

(d) an invoice issued by a second stage dealer of excisable goods under rule 52AA;

(e) an invoice issued by an importer under rule 52AA;

(f) an invoice issued by an importer from his depot or from the premises of the consignment agent of the said importer provided the said depot or the premises, as the case may be, is registered under rule 174;

(g) an invoice issued by a first stage or second stage dealer of imported goods registered under rule 174;

(h) an invoice issued by a manufacturer of final products for clearance of inputs or capital goods as such. 

(i) a supplementary invoice, issued by a manufacturer of inputs or capital goods under rule 52A or rule 52AA or rule 100E from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, in case additional amount of excise duties has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 or the rules made thereunder with intent to evade payment of duty.

Explanation. - For the purposes of this section,-

     (i) "first stage dealer" means a dealer who purchases the goods directly from-

          (a) the manufacturer under the cover of an invoice issued under rule 52A or rule 100E or from the depot of the said manufacturer, or from premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, under cover of an invoice; or

          (b) an importer or from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice;

     (ii) "second stage dealer" means a dealer who purchases the goods from a first stage dealer.

(2)     (a) The manufacturer shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken the CENVAT credit are goods on which the appropriate duty of excise as indicated in the documents accompanying the goods, has been paid.

     (b) The CENVAT credit in respect of inputs or capital goods purchased from a first stage or second stage dealer shall be allowed only if such dealer has maintained records indicating the fact that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such inputs or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him.

Explanation.- The provisions of the explanation under rule 173Q shall apply mutatis mutandis for the purpose of determining whether the manufacturer has taken reasonable steps as required by this sub-rule.

(3) The manufacturer of final products shall maintain proper records for the receipt, disposal, consumption and inventory of the inputs and capital goods in which the relevant information regarding the value, duty paid, the person from whom the inputs or capital goods have been purchased is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer taking such credit.

(4) The manufacturer of final products shall submit within ten days from the close of each month to the Superintendent of Central Excise, a monthly return in the prescribed form. 

Explanation. - In respect of a manufacturer availing of any exemption based on the value or quantity of clearances in a financial year, the provisions of this sub-rule shall have effect in that financial year as if for the expression "month", the expression "quarter" was substituted.

57AF. Transfer of credit.-
(1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory.

(2) The transfer of the CENVAT credit under sub-rule (1) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred alongwith the factory to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Commissioner.

57AG. Transitional provision.-
(1) Any amount of credit earned by a manufacturer under rules 57A,57B or 57Q, as they existed prior to 1st day of April, 2000 and remaining unutilized on that day shall be allowable as CENVAT credit to such manufacturer under these rules, and be allowed to be utilized in accordance with these rules.

(2) A manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been availing of the credit of the duty paid on inputs before such option is exercised, shall be required to pay an amount equivalent to the credit, if any, allowed to him in respect of inputs lying in stock or used in any finished excisable goods lying in stock on the date when such option is exercised and after deducting the said amount from the balance, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export.

(3)     (a) An independent texturiser who has availed of the credit of duty paid on inputs used for manufacture of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02 of the said First Schedule shall be required to pay an amount equivalent to the credit, if any, allowed to him in respect of such inputs lying in stock, or used in the manufacture of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02 of the said First Schedule lying in stock as on the 1st day of March, 2000, or thereafter.

     (b) An independent texturiser who manufactures texturised yarn (including draw twisted or draw-wound yarn) of polyesters falling under heading No. 54.02, and also other goods, shall be allowed to take CENVAT credit of the duty paid on inputs used for the manufacture of such other goods, lying in stock as on the 1st day of March, 2000 or received in his factory on or after the 1st day of March, 2000.

(4) A manufacturer, who had debited amount equivalent to ten per cent of the value of inputs or as the case may be, partially processed inputs while removing such inputs or partially processed inputs under the sub-rule (4) of rule 57F as it existed prior to the 1st day of April, 2000, and receives back the inputs or as the case may be, partially processed inputs, on or after the 1st day of April, 2000, shall be allowed to take CENVAT credit of the amount debited by him and shall be allowed to utilize the CENVAT credit in accordance with these rules.

Explanation.- For the purposes of this sub-rule, "independent texturiser" means a manufacturer engaged in the manufacture of texturised yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02 of the said First Schedule, and who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yarn of polyesters falling under sub-heading no.  5402.42 of the said First Schedule.

(5) A manufacturer of machinery falling under heading Nos. 84.26, 84.27, 84.28, 84.29 and 84.30 and motor vehicles, who had received, on or after the 1st day of March, 2000, tyres, tubes and flaps falling under sub-heading Nos. 4011.90, 4012.11, 4012.19, 4012.90 and 4013.90 cleared before the 1st day of March, 2000 on which special excise duty has been paid as it existed prior to the 1st day of March, 2000, for use in the manufacture of machinery falling under heading Nos. 84.26, 84.27, 84.28, 84.29 and 84.30 and motor vehicles, shall be allowed to take CENVAT credit of the amount of special excise duty paid by him and shall be allowed to utilize the CENVAT credit in accordance with these rules.

57AH. Recovery of credit wrongly taken.-
(1) Where the CENVAT credit has been taken or utilised  wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of sections 11A, 11AA and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries.

(2) Where the CENVAT credit has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Act or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty and the provisions of section 11AC of the Act shall apply mutatis mutandis.

57AI. Omitted.
57 AJ. Special dispensation in respect of inputs manufactured in factories locate of North East region.-
Notwithstanding anything contained in these rules, where a manufacturer has cleared any inputs or capital goods, in terms of notification of the Government of lndia in the Ministry of Finance (Department of Revenue) No. 32/99- Central Excise, dated the 8th July, 1999, or notification no. 33/99- Central Excise, dated the 8th July, 1999, the CENVAT credit of duty paid on such inputs or capital goods shall be admissible as if no portion of the duty paid on such inputs or capital goods was exempted under any of the said notifications.
57AK. Power of Central Government to notify goods for deemed credit.-
Notwithstanding anything contained in rule 57AB, the Central Government may, by notification in the Official Gazette declare the inputs on which the duties of excise, or additional duty paid, shall be deemed to have been paid at such rate or equivalent to such amount as may be specified in the said notification and allow credit of such duty deemed to have been paid in such manner and subject to such conditions as may be specified in the said notification even if the declared inputs are not used directly by the manufacturer of final products declared in the said notification, but are costained in the said final products.".".

3. In the Central Excise (Second Amendment) Rules, 2000, in rule 7, in sub-rule (i), in clause (1) (b),-

     (i) for the words "shall discharge his duty liability by debiting such account-current" the words "shall discharge his duty liability by debiting such account-current or by utilising CENVAT credit" shall be substituted;

          (a) after sub-clause (ii), the following sub-clause shall be inserted, namely,-

"(iii) at the end of each fortnight, the manufacturer shall determine the total amount of excise duty payable on the excisable goods removed during the fortnight, and he shall discharge the total duty liability so payable by making debit entry in the account current or by utilising CENVAT credit, as the case may be.".

B. MATCHES
(Composition for match heads)

58. to 61. Omitted

Disposal of finished matches

62. Finished matches to be kept in a secure place.-
Finished matches which have not been packed shall, except during working
hours, be kept in the manufacturing room, or in a closed part of the premises under lock and key.
63. Number of matches which may be packed in boxes.-
All matches, other than matches of the type known as "Bengal
Lights" or packed in booklets, which are issued by the manufacturers for home consumption shall be packed in boxes containing on
the average 50 sticks:

Provided that matches made of bamboo splints and produced in a factory the annual output of which does not exceed 500 million
matches, may also be packed in boxes containing on the average 40 sticks:

Provided further that the Commissioner may, by an order in writing and subject to such limitations and conditions as may be
prescribed by him in the order permit a manufacturer to pack matches in boxes containing a higher or lower number of match sticks.

64. Each box or booklet to bear a Central Excise Stamp.-
The duty on matches shall be paid by affixing to each box or booklet a Government Central Excise Stamp of a value appropriate to the rate of duty, and where such boxes or booklets are issued in packages, each package reckoned by the manufacturer as his minimum unit of distribution shall bear the manufacturer"s trade label and a mark clearly showing the class of matches contained in the package :

Provided that, where the matches are intended for export out of India Central Excise Stamps need not be affixed thereto and, unlessthey are to be exported under bond in accordance with rule 13, the duty shall be paid in accordance with rule 52:

Provided further that where the Central Government is satisfied that by reason of the fact that the necessary Central Excise Stamps are not available or for any other relevant reason it is necessary or expedient so to do, it may, by general or special order, allow the duty on matches to be paid, without affixing Central Excise Stamps to such box or booklet, in accordance with rule 52 in respect of-

     (i) any manufacturer or classes of manufacturers, or
     (ii) matches manufactured in any area or areas, or
     (iii) any categories of matches.

65. Procurement of Central Excise Stamps.-
(1) All Central Excise Stamps shall be procured from a District Revenue Treasury or a sub-Treasury.

(2)     (i) A registered person wishing to obtain Central Excise Stamps shall submit to the treasury a challan in quintu-plicate for the amount to be paid, specifying on the reverse the number and class of Central Excise Stamps required, together with their price. The treasury shall accept the amount specified in the challan and shall return the duplicate, triplicate and quintuplicate copies of the receipted challan to the registered person.

     (ii) The registered person shall present duplicate and quintuplicate copies of the challan to the proper officer who, after satisfying himself about the correctness of the amount remitted, shall return the quintuplicate copy to the assessee with an endorsement to the District Revenue Treasury Officer or Sub-Treasury Officer to issue the appropriate number of Central Excise Stamps. The registered person shall present quintuplicate copy with such endorsement to the District Revenue Treasury Officer or Sub-Treasury Officer, who shall thereafter supply the Central Excise Stamps to the registered person.

(3) A registered person wishing to obtain Central Excise Stamps on credit shall execute a trust receipt and a bond in the proper Form with such surety or sufficient security as the Commissioner may require.

(4) When the provisions of sub-rule (3) have been complied with, the proper Officer shall, after due enquiry, authorise the issue of Central Excise Stamps on credit to the registered person and shall communicate to the District Revenue Treasury Officer or Sub-Treasury Officer concerned and to the proper officer full particulars of the security deposited and the extent of credit granted. The number of Central Excise Stamps to be supplied at a time shall not exceed the average out-turn of the factory for a number of days, not exceeding ten, to be fixed by the Commissioner:

Provided that the total price of unused Central Excise Stamps in balance with the registered person and of those indented for shall not exceed the amount of security furnished by the registered person.

(5) A registered person authorised to obtain Central Excise Stamps on credit shall for each supply submit to the proper officer a requisition in quadruplicate in the proper Form. If satisfied that the details stated in the requisition are correct the officer shall retain the triplicate for his own record and send the original, duplicate and quadruplicate to the District Revenue Treasury Officer or Sub-Treasury Officer concerned, who shall retain the original in his office, issue the number of Central Excise Stamps required, return the duplicate, duly endorsed to the proper officer and send the quadruplicate copy to the Chief Accounts Officer of the Commissionerate.

(6) A registered person claiming assessment of the matches produced in his factory in accordance with the notification issued under rule 8 shall, at the time of purchasing Central Excise Stamps present to the District Revenue Treasury Officer or Sub-Treasury Officer a challan or R.Q.I., duly countersigned by the proper officer. The proper officer shall certify that duty has been calculated on the matches at the appropriate rate. Form B.3(Sur./Sec.)(11KB)
Form B.3(T.R.)(8KB)
Form:RQ1(9KB)
Form:RQ.1(9KB)

66. Central Excise Stamps to be kept in a secure place and periodically inspected.-
The manufacturer shall keep all his Central Excise Stamps, whether procured for cash or on credit, in a secure place within the factory premises, and shall keep them open for inspection at any time by any officer. The proper officer may at any time examine the stock of the Central Excise Stamps on any working day and check the balance with that shown in the register and shall record the result in the register. If any Central Excise Stamps procured on credit are missing or unaccounted for, he shall call on the registered person to pay immediately into the Treasury the full price thereof and to produce the treasury challan within a week.
67. Manufacturer to keep account of Central Excise Stamps purchased and used.-
(1) The manufacturer shall maintain an account of quantity and value of-
  1. receipts of Central Excise Stamps purchased for cash and on credit;
  2. Central Excise Stamps affixed on boxes or booklets;
  3. Central Excise Stamps damaged and handed over to the proper officer, and
  4. Central Excise Stamps lost in the process or not otherwise accounted for.
(2) The manufacturer shall submit to the proper officer monthly returns in the proper Form before the 10th day of the month following that to which the return relates.
68. Manner of affixing Central Excise Stamps.-
Every Central Excise Stamp shall be so affixed that-
(a) the box or booklet on which the Central Excise Stamp is affixed cannot be opened without tearing the Central Excise Stamp;
(b) when it is affixed to a box, the Central Excise Stamp shall cover one side of the inner tray and a part of the rear or bottom or front or top of the outer box, and the Central Excise Stamp itself shall not be covered by either the factory"s label or any advertisement label.
69. Affixing of Central Excise Stamps to matches redeemed after confiscation.-
If matches confiscated under the Act or
these Rules are returned to the owner on payment of a fine in lieu of confiscation, or are otherwise disposed of in a manner admitting of their passing into consumption, the proper officer shall, if the containers do not bear proper Central Excise Stamps, cause Central Excise Stamps of the requisite value to be affixed thereto and may allow them to be affixed over the manufacturer"s label.
70. Matches to be packed, affixed with Central Excise Stamps and transferred to store-room immediately after finishing.-
As soon as possible after matches are finished they shall, unless intended for export, be put into boxes or booklets which shall then save as otherwise provided by these rules be affixed with Central Excise Stamps and enclosed in packets or other outer coverings and deposited in the factory"s bonded store-room.
71. Method of packing.-
(1) No packet or case containing boxes or booklets of matches other than those intended for export out of India and those to which the provisions of the second proviso to rule 64 apply shall be closed and reckoned as a unit unless a
Central Excise Stamp of the appropriate class has been affixed to each box or booklet in the manner laid down in rule 70.

(2) Each case or packet shall contain only an integral number whether one hundred boxes or booklets of matches or multiples thereof. The boxes or booklets in each case or packet shall contain the same number of matches on the average and shall, except where the matches are exempted from bearing Central Excise Stamps, bear Central Excise Stamps of the same class.

(3) Every packet, box or booklet, or the manufacturer"s label affixed thereto shall bear in clearly discernible characters, the name of the factory or a distinguishing mark, which may take the form of a special design whereby the origin of the matches can be traced. Specimens of all such labels shall be submitted to the Commissioner for his approval and record, before they are brought into use:

        Provided that the Commissioner may by an order in writing and subject to such limitations and conditions as may be prescribed by him in the order relax the provisions of this sub-rule.

(4) On each case or packet of matches shall be legibly marked in ink or oil colour a progressive number, commencing with No. 1, for each year and in different series for each class of matches, the number of boxes or booklets in hundreds contained in each case or packet and the grade of Central Excise Stamps affixed thereto.

(5) Every box or booklet of matches, other than matches of the type known as Bengal Lights, issued for home consumption, shall have on the box or booklet, or on the manufacturer"s label affixed thereto, a statement in clearly discernible character, of the retail price at which the manufacturer intends that the box or booklet should be sold:

        Provided that the Commissioner may by an order in writing and subject to such limitations and conditions as may be prescribed by him in the order relax the provisions of this sub-rule.

72. Examination by proper officer at the factory.-
If the proper officer is in doubt whether Central Excise Stamps have been affixed or whether boxes or booklets contain the proper number of matches or whether cases or packets contain the proper number of boxes or booklets, he may require the registered person to open the case, packet, boxes or booklets for examination and in the event of any discrepancy, he may detain the goods.
73. Test-check of contents of boxes and booklets.-
In order to verify the average number of matches contained in a box or booklet the proper officer or any other officer specially deputed by him in this behalf may, after giving notice of his intention to the registered person, determine this number by taking samples, consisting of at least one box or booklet in every ten hundred thereof, and the duty payable shall be assessed on the result of this sampling.
74. Disposal of matches examined under rule 72 or 73 and of Central Excise Stamps damaged during examination.- 
(1) If any Central Excise Stamps are torn during examination under rule 72 or rule 73, the proper officer may order that the containers to which they are affixed shall be returned to the registered person for re-stamping and shall be replaced immediately by an equal number of boxes or booklets of the same class from the finished stock.

(2) If examination under rule 72 or rule 73 shows that Central Excise Stamps of insufficient value have been affixed, the proper officer may order the boxes or booklets in question to be returned to the factory, where the Central Excise Stamps shall be removed and replaced by others of the proper value.

75. Deposit of matches in store-room.-
(1) Immediately after affixing Central Excise Stamps, the matches shall be deposited in a
storeroom approved under rule 47

(2) The store-room shall be secured by the registered person to the satisfaction of the proper officer and it shall remain open for transaction during such hours and days on which the factory is working, as the Commissioner may approve.

76. Matches intended for export may also be deposited in the store-room.-
All boxes or booklets containing matches intended for export and on which no Central Excise Stamps have been affixed and all loose matches to be exported shall, before they are removed to the store-room, be packed into cases or packets on which shall be pasted labels inscribed "Matches not affixed with Central Excise Stamps for Export" and shall be entered in daily stock account maintained under rule 53.
Form E.B.4(Matches)(7KB)
77. Omitted.
78. Manner of storage in the store-room.-
(1) Separate compartments or separate divisions in the same compartment shall be allotted in the store-room for-

    (i) packages containing matches bearing Central Excise Stamps purchased for cash;
    (ii) packages containing matches bearing Central Excise Stamps purchased on credit;
    (iii) packages of matches not affixed with Central Excise Stamps intended for export.

(2) To facilitate inspection, check and delivery from the store-room, the matches shall be stored in separate stacks, according to their class and the size of the case or packet in which they are contained.
Removal of matches from the store-room

79. Removal of defective matches for reconditioning.-
Defective matches may, under the supervision of the proper officer, be removed from the store-room to any other part of the factory for reconditioning. Matches not affixed with Central Excise Stamps originally intended for export and no longer required for that purpose may also be returned to the finishing room for affixation of Central Excise Stamps. Full particulars of matches so removed, shall be entered in the store-room register.
80. Omitted
81. Omitted
82. Removal of matches bearing Central Excise Stamps purchased on credit.-
When it is desired to remove matches,
bearing Central Excise Stamps purchased on credit the Registered person shall, unless he maintains an account-current with the Commissioner under rule 9 pay the price of the Central Excise Stamps in the manner prescribed in rule 52 and no such matches may be removed until after the price of the Central Excise Stamps has been so paid or has been debited to such account-current, if any.
82A. Storage of duty paid matches near the factory premises.-
The Commissioner of Central Excise may prohibit a Registered person to whom Registration Certificate has been granted under these rules for the manufacture of matches and who has at any time  been punished for any offence under the Central Excises and Salt Act, 1944 (1 of 1944), or the rules made thereunder, from storing matches, removed after payment of duty, in any godown, or place or premises of storage, situated within a distance of two kilometres from the factory of such Registered person.

C. SUGAR

83. to 92. Omitted

C- I. KHANDSARI SUGAR

92A. to 92F. Omitted

D. MANUFACTURED TOBACCO

93. Manufacture and disposal of excisable tobacco products.- 
No excisable tobacco products shall be delivered from any factory except under the following conditions: -

    (a) Such products shall be made into separate packets.

    (b) Each such packet, whether retail or wholesale, shall be enclosed by, and at the expense of, the manufacturer, in a wrapper or other outer covering, and, unless exempted by the Central Board of Excise and Customs, by general or special order, each such packet, or the manufacturer"s label affixed thereto, shall bear in clearly discernible characters, the following particulars -

        (i) the name and address of the factory;
        (ii) the number of his Registration Certificate in Form L4; and
        (iii) the trade brand of the product.
        Specimens of all such wrappers, outer covering or labels shall be submitted to the Commissioner for his approval before they are brought into use.

    (c) An application for clearance in the proper form shall be delivered to the officer-in-charge of the factory at least 12 hours (or such other period as the Commissioner may in any particular case require or allow), before it is intended to remove the goods:

        Provided that where removals from a factory are frequent and the manufacturer maintains a sufficient credit balance in his account-current maintained under rule 9 for payment of duty, the Assistant Commissioner of Central Excise may, on a request by the manufacturer, permit, by an order in writing, removal of goods on presentation of a gate-pass as prescribed under rule 52A, subject to the observance of such procedure as may be prescribed in this regard by the Commissioner.

    (d) No cigars and cheroots mentioned in Heading No. 24.02 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) shall be delivered from any factory unless-

        (1) they are put into packets containing 5,10, 25, 50 or 100 cigars or cheroots, as the case may be;
        (2) each such packet consists of a wooden, tin or cardboard box opening only at the top or of a paper wrapper top completely closed on all sides and with all sides and with all outer edges gummed down.
Form:A.R.1(0KB)

94. Daily account of tobacco products manufactured.-
(1) Every manufacturer of excisable tobacco products including raw biri, whether loose, labelled or unlabelled, shall maintain proper records and shall enter in such account the following particulars, namely:-

    (i) the weights, quantities and particulars of all tobacco and other materials and ingredients received by him for the purpose of being manufactured;
    (ii) the weight and quantities thereof consumed in such manufacture;
    (iii) the weight, quantities and particulars of tobacco, materials, ingredients, stalks, waste, and other refuse remaining after or caused by such manufacture;
    (iv) the quantity of each product so produced;
    (v) the quantity thereof made up into packets, wrapped, labelled and cleared from the factory, with the number of packets of each size or weight respectively.
    (vi) receipt of raw biris from the contractors, sattedars or agents, quantity issued for grading or sorting, quantity of biris destroyed, quantity of tobacco recovered from damaged biris.

(2) Every assessee shall furnish to the proper officer, a list in duplicate, of all the records prepared or mainatained by him for accounting of transactions in regard to receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods.

Explanation.- For the purposes in this rule,-

  1. the expression "records" shall include account, agreement, invoice, pricelist, return, statement or any other source document, whether in writing or in any other form;
  2. the expression "source documents" means all documents which form the basis of accounting of transactions and includes sales invoice, purchase invoice, journal voucher, delivery challan and debit or credit note.
(3) Where an assessee maintains or generates such records by using computer, such assessee shall submit the following information to the proper officer, namely:-
  1. documentation including policy and procedure manuals, instructions to record the flow and treatment of transactions through accounting system, from the stage of initiation to closure and storage;
  2. account of the audit trail and inter-linkages including the source document, whether paper or electronic, and the financial accounts; and
  3. record layout, data dictionary and explanation for codes used and total number of records in each field alongwith sample copies of documents and whenever changes are made in the aforesaid systems adopted by the assessee, he shall inform the proper officer and submit the relevant document.
(4) The assessee shall be responsible for keeping, maintaining, retaining and safeguarding records.

(5) Every assessee shall, on demand makes available to the Central Excise Officer or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, the following, namely:-

  1. The records maintained or prepared by him in terms of sub-rule (2);
  2. The cost audit reports, if any, under section 223B of the Companies Act, 1956 (1 of 1956);
  3. The income-tax audit report, if any, under section 44AB of Income-tax Act, 1961 (43 of 1961), for the scrutiny of the officer or audit party, as the case may be.
(6) Every assessee who is having more than one factory and maintains separate records in respect of every factory for the purpose of audit, then, he shall produce the said records for audit purposes.

(7) Where the Commissioner or the Comptroller and Auditor General of India decides to undertake the audit of the records of any assessee, the said assessee shall be given notice thereof at least fifteen days before the commencement of such audit. The audit party deputed for the purpose shall also call for in writing the records, which are required to be produced by the assessee, either before or during the course of audit.

(8) Every assessee, who maintains or generates his records by using computer, shall provide the required records in the form of tapes or floppies or cartridges or compact disk or any other media in an electronically readable format as specified by the Commissioner at the time of audit. The copies of records, so furnished, shall be duly authenticated by the assessee.

(9) All records submitted to audit party in electronic format shall be used only for verification of payment of duties of excise or for verification of compliance of the provisions of the Act or the rules made thereunder and shall not be used for any other purpose without the written consent of the assessee.

(10) Every assessee shall preserve the records, including books of accounts and source documents and data in any electronic media, where any document is generated on computer, for five financial years immediately after the financial year to which the records pertain.

95. Omitted
95A. Special procedure for removal in bond of biris to other premises.-
The Commissioner may, by special or general order and subject to such conditions as may be specified by him, permit a manufacturer to remove biris manufactured by him to his another registered premises or to the premises of another assessee for completion of certain manufacturing processes and allow the finished biris to be removed on payment of duty or without payment of duty for export from such other premises:

        Provided that such permission shall be granted only subject to the execution of a bond either by the manufacturer or by the assessee.

E. TYRES

96. Abatement of duty on defective tyres.-
If a manufacturer desires that certain tyres should, in consequence of damage sustained during the course of manufacture, be assessed on a value less than the standard selling price he shall declare in writing on the application for clearance of the goods, that such damage has been sustained and each such tyre shall be clearly and legibly embossed or indelibly stamped with the words "Second", "Clearance" or "Defective".

E-I (a). COTTON FABRICS, JUTE MANUFACTURES AND MAN-MADE FABRICS

96A. Omitted
96B. Omitted
96C. Omitted
96D. Omitted
96DD. Procedure for removal of cotton fabrics or man-made fabrics from one factory to another without payment of duty for embroidery.-
(1) Cotton fabrics or man-made fabrics, may be removed without payment of duty from one factory to another factory for the purpose of embroidery, subject to the observance of the procedure hereinafter prescribed.

(2) When cotton fabrics or man-made fabrics, are removed from the factory where they are manufactured to another factory for embroidery, the consignor shall follow the procedure as required by rules 156A and 156B, as modified by rule 173N.

(3) If cotton fabrics or man-made fabrics, after being embroidered, are cleared for home consumption from the embroidery factory, the duty payable at the time of such clearance and such other dues that may be payable in respect of such goods may be paid either by the owner of the embroidery factory or by the owner of the originating factory.

(4) If cotton fabrics or man-made fabrics, after being embroidered, are removed without payment of duty to one or more factories for the purpose of further embroidery, or to the originating factory, such removal shall be subject to, and in accordance with, the provisions of sub-rule (2).

E-I (b). COTTON YARN, JUTE TWIST, YARN, THREAD, ROPES AND TWINE AND YARN 
(OTHER THAN COTTON YARN OR JUTE YARN)

96E. Procedure for removal of cotton yarn or jute twist, yarn, thread, ropes and twine from one factory to another without payment of duty.-
(1) Cotton yam or jute twist, yarn, thread, ropes and twine may be removed without payment of duty from one factory to another for the purpose of processing or packing or for the purpose of manufacture of cotton fabrics or jute manufactures subject to the observance of the procedure hereinafter prescribed.

(2) For the purpose of this rule, "factory" means a factory working with the aid of power in which-

    (a) cotton yarn or jute twist, yarn, thread, ropes and twine is spun and cotton fabrics or jute manufactures are woven; or

    (b) only cotton fabrics or jute manufactures are woven and the duty thereon is paid on square metre, ad valorem or weight basis, as the case may be; or

    (c) only cotton yarn or jute twist, yarn, thread, ropes and twine is spun, or otherwise manufactured.

(3) When cotton yarn or jute twist, yarn, thread, ropes and twine is removed from one factory to another, the consignor shall, follow the procedure as required by rules 156A and 156B, as modified by rule 173N.

(4) If cotton yarn, after being processed, is removed without payment of duty to one or more factories for the purpose of further processing, or to the originating factory, such removal shall be subject to and in accordance with the provisions of sub-rule (3).

96EE. Procedure for removal of yarn (other than cotton yarn or jute yarn) from one factory to another without payment of duty.-
(1) Any yarn, other than cotton yarn or jute yarn, as may be specified by the Central Government by notification in the Official Gazette (hereinafter referred to as the said yarn), may be removed without payment of duty from one factory to another factory of the same manufacturer for the purpose of manufacture of cotton fabrics subject to the observance of the procedure hereinafter prescribed.

(2) For the purposes of this rule, "factory" means a factory working with the aid of power in which 

    (a) the said yarn is spun; or
    (b) the said yarn is spun and cotton fabrics are woven; or
    (c) only cotton fabrics are woven ad the duty thereon is paid on square metre, ad valorem or weight basis, as the case may be.

(3) When the said yarn is removed from one factory to another factory of the same manufacturer, the consignor shall follow the procedure required by rules156A and 156B as modified by rule173N.

E. II-TEA

96F. Fixation of areas for the purpose of excise duty.-
Having regard to the weighted average sale price in the internal and export auctions of tea in India, the Central Government may, by notification in the Official Gazette, from time to time, group areas into zones for the purpose of assessment of tea produced in such areas.
96G. Omitted
96H. Omitted

E-III.- Cotton fabrics produced on powerlooms-Special Procedure

96I. to 96MMMMM. Omitted

E-IV.- Vegetable product

96N. Omitted

E-V.- Vegetable non-essential oils - Produced with the aid of power - Special procedure

96O. to 96ZZZZ. Omitted

E - VI. STAINLESS STEEL PATTIS OR PATTAS, OR ALUMINIUM CIRCLES

96ZA. Application to avail of special procedure.-
(1) Where a manufacturer who subjects stainless steel pattis or pattas, falling under Chapter 72, or aluminium circles falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), to the process of cold rolling with the aid of cold rolling machines, makes in the proper form, an application to the Commissioner, in this behalf, the special provisions contained in this section shall, on such application being granted by the Commissioner, apply to such manufacturer in substitution of the provisions contained elsewhere than in this section for the period in respect of which the application has been so granted.

(2) Such application shall be made so as to cover a period of not less than twelve consecutive calendar months, but permission may be granted for a shorter period in the discretion of the Commissioner.

(3) If at any time during such period the manufacturer fails to avail himself of the special provisions contained in this section, he shall, unless otherwise ordered by the Commissioner, be precluded from availing himself of such provisions for a period of six months from the date of such failure.

(4) If the manufacturer desires to avail himself of the special provisions contained in this section on the expiry of the period for which his application was granted, he shall, before such expiry, make an application to the Commissioner under sub-rule (1) and on his failure to do so, he shall, unless otherwise ordered by the Commissioner, be precluded from availing himself of such provisions for a period of six months from the date of such expiry.
Form:A.S.P(14KB)

96ZB. Discharge of liability for duty on payment of certain sum.-
(1) Having regard to the average production of cold rolled stainless steel pattis or pattas, falling under Chapter 72, or aluminium circles falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), in India per month or per year for cold rolling machines installed for the processing of stainless steel pattis/pattas, or aluminium circles and any other relevant factor, the Central Government may, by notification in the Official Gazette, fix, from time to time, the rate of duty per month or per year, per each such cold rolling machines, subject to such conditions and limitations hereinafter laid down, and if a manufacturer whose application has been granted under rule 96ZA pays a sum calculated according to such rate of duty in the manner and subject to the conditions and limitations hereinafter laid down, such payment shall be a full discharge of his liability for duty leviable on his production of such cold re-rolled stainless steel pattis/pattas, or aluminium circles during the period for which the said sum has been paid:

        Provided that if there is an alteration in the rate of duty, the sum payable shall be recalculated on the basis of the revised rate, from the date of alteration and liability for duty leviable on the production of stainless steel pattis/pattas, or aluminium circles from that date shall not be discharged unless the differential duty is paid; should, however, the amount of duty so recalculated, be less than the sum paid, the balance shall be refunded to the manufacturer:

        Provided further that no credit of duty paid on any material, component part, machinery or finished products used for cold rolling of stainless steel pattis/pattas, or aluminium circles shall be allowed under this section for making payment of duty referred to in this sub-rule above:

        Provided also that when a manufacturer makes an application for the first time under rule 96ZA for availing of the special provisions contained in this section, the duty liability for the month in which the application is granted shall be calculated pro-rata on the basis of the total number of days in that month and the number of days remaining in the months from the date of such grant.

(2) The sum payable under sub-rule (1) shall be calculated by application of such rate to the maximum number of cold rolling machines installed by or on behalf of such manufacturer in one or more premises at any time during three calendar months immediately preceding the calendar month in which the application under rule 96ZC is made.

(3) Such sum shall be tendered by such manufacturer along with such application.
Form:D.D.2(10KB)

96ZC. Manufacturer"s declaration and accounts.-
(1) Such manufacturer shall, at any time during the calendar month immediately preceding any month or part thereof, as the case may be, in respect of which he has been permitted to avail himself of the provision of this section, make an application to the proper officer in the proper Form for leave to remove stainless steel pattis/pattas, or aluminium circles from his premises during the ensuing month, declaring therein the maximum number of cold rolling machines installed by him or on his behalf, in one or more premises at any time during three calendar month immediately preceding the said calendar month.

(2) If such application is not made to the proper officer within the time limit laid down in sub-rule (1), the manufacturer shall, unless, otherwise directed by the Commissioner, and in exceptional circumstances, be liable to pay duty on his entire production of stainless steel pattis/pattas, or aluminium circles during the month or part thereof in respect of which the application was to be made, at the rate prescribed in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) read with any relevant notification or notifications issued under sub-section (1) of section 5A of the Act.

(3) Such manufacturer shall also intimate the proper officer in writing of any proposed change in the number of cold rolling machines installed by him or on his behalf, and obtain the written approval of such officer before making any such change.
Form:A.R.8AA(17KB)

96ZD. Exemption from certain provisions, no rebate of excise duty on export.-
(1) During the period in respect of which any
manufacturer has been permitted to avail himself of the provisions of this section, he shall be exempt from the operation of all the provisions of rules 9 [except the third proviso to sub-rule (1) thereof] , 47,49, 50, 51, 51A, 52,52A, 53,54,55, 223, 223A, 223B, 224,224A and 229.

(2) Except in accordance with such special terms, conditions and limitations as the Central Board of Excise and Customs may hereafter by notification specify in this behalf, no rebate of excise duty shall be paid under rule 12 in respect of any stainless steel pattis/pattas, or aluminium circles exported out of India, out of the stock produced by such manufacturer during such period.

96ZE. Omitted.
96ZF. Provisions regarding new factories and closed factories resuming production.
In the case of a manufacturer who commences production for the first time or who recommences production after having ceased production for a continuous period of not less than three months, and who has been permitted by the Commissioner under sub-rule (1) of rule 96ZA to avail of the special provisions contained in this section, the amount payable by him for the first month or part thereof, as the case may be, shall be provisionally calculated on the basis of his declaration of the maximum number of cold rolling machines that are or are likely to be installed by him or on his behalf during such period. At the expiry of the period, the amount payable shall be recalculated on the basis of the maximum number of cold rolling machines actually installed and if the initial payment falls short of the total liability so determined, the deficiency shall be recovered from the manufacturer. If, however, the total liability is less than the initial deposit, the balance shall be refunded to the manufacturer.
96ZG. Power to condone failure to apply for special procedure.-
Notwithstanding anything contained in this section, the Commissioner may, at his discretion for reasons to be recorded in writing and subject to such conditions as he may lay down, apply the provisions contained in this section to a manufacturer who has failed to avail himself of the special procedure, or to comply with any condition laid down in this section within the specified time limit.
96ZGG. Provision regarding factories ceasing to work or reverting to the normal procedure.-
Notwithstanding anything contained in rules 96ZA to 96ZG, where a manufacturer who had availed himself of the special provisions contained in this section ceases to work or reverts to the normal procedure, the duty payable by him in the month during which he has availed himself of the special provisions shall be calculated on the basis of the maximum number of cold rolling machines installed during the last month in the manner prescribed in rule 96ZF and the amount already paid for the month in accordance with rule 96ZB shall be adjusted towards the duty so calculated and on such adjustment if there is any excess payment it shall be refunded to the manufacturer and any deficiency in duty shall be recovered from the manufacturer.

        Explanation.-A manufacturer, who ceases to work his factory for one or two shifts only, shall not be deemed to cease to work within the meaning of this rule.

E-IX. EMBROIDERY IN THE PIECE, IN STRIPS OR IN MOTIFS-SPECIAL PROCEDURE

96ZH. Application to avail of special procedure.-
(1) Where a manufacturer who manufactures embroidery in the piece, in strips or in motifs (hereinafter referred to as "the embroidery") with the aid of vertical type automatic shuttle embroidery machine or machines (hereinafter referred to as "the machine" or "the machines", as the case may be) makes in the proper form an application to the Commissioner in this behalf, the special provisions contained in this section shall, on such application being granted by the Commissioner, apply to such manufacturer in substitution of the provisions contained elsewhere than in this section for the period in respect of which the application has been so granted.

(2) Such application shall be made so as to cover a period of not less than six consecutive calendar months, but may be granted for a shorter period for reasons to be recorded in writing by the Commissioner.

(3) If, at any time during such period, the manufacturer does not desire to avail himself of the special provisions contained in this section, he shall give a notice in writing to the proper officer of his intention at least one week in advance; once the manufacturer has ceased to avail himself of such special provisions, from any date, he shall be precluded from availing himself of such provisions for a period of six months from that date.

(4) If the manufacturer desires to avail himself of the special provisions contained in this section on the expiry of the period for which his application was granted, he shall, not later than a week before such expiry, make an application to the Commissioner under sub-rule (1);

and on his failure to do so, he shall, except as provided in rule 96ZM, be precluded from availing himself of such provisions for a period of six months from the date of such expiry.

(5) The Commissioner may permit the manufacturer to avail himself of the special provisions contained in this section for any period before the commencement of the Central Excise (Fourth Amendment) Rules, 1968 but not earlier than 1st March, 1968, if the Commissioner is satisfied that the manufacturer has maintained proper records and accounts of the machines employed and the embroidery manufactured in each shift during that period.
Form:A.S.P(14KB)

96ZI. Discharge of liability for duty on payment of certain sum.-
(1) Having regard to the average production of the embroidery per machine, and any other relevant factor, the Central Government may, by notification in the Official Gazette, fix from time to time, the rate per metre length of such machine, per shift, or per day, or per week, subject to such conditions and limitations as it may think fit to impose, and may fix different rates for such machines employed in the manufacture of different varieties of the embroidery or of the embroidery done on different varieties of base fabrics or for machines working at different speeds or for machines installed during different periods; and if a manufacturer whose application has been granted under rule 96ZH pays before the commencement of any shift a sum calculated according to such rate, in the manner and subject to the conditions hereinafter laid down, such payment shall be full discharge of his liability for the duty leviable on his production of the embroidery during the said shift:

        Provided that if there is an alteration in the rates of duty, the sum payable shall be recalculated on the basis of the revised rates from the date of alteration and liability for duty leviable on the production of the embroidery from that date shall not be discharged unless the differential duty is paid; if, however, the amount of duty so recalculated be less than the sum paid, the balance shall be refunded to the manufacturer:

        Provided further that no credit of duty paid on inputs used in the manufacture of the embroidery and capital goods used within the factory of manufacture of such embroidery shall be allowed under rule 57A, 57B or 57Q, as the case may be.

(2) The sum payable under sub-rule (1) shall be calculated by application of the appropriate rate to the metre length of each of the machines intended to be employed by the manufacturer during the shift.

(3) Such sum shall be paid by such manufacturer by debit in the account-current maintained under rule 96ZJ before commencement of the shift.

(4) If such payment is not made in the manner and within the time-limit laid down in this rule, the manufacturer shall, unless otherwise directed by the Commissioner, and in exceptional circumstances, be liable to pay duty on his entire production of the embroidery during the shift or shifts, in respect of which the payment was to be made, at the rate specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

(5) Where the Commissioner has permitted the manufacturer to avail himself of the special provisions contained in this section in respect of any period referred to in sub-rule (5) of rule 96ZH, the manufacturer shall file with the proper officer a duly signed statement showing in respect of every shift worked on each day during that period-

    (a) the brand name and other identifying particulars of each of the machines employed. 
    (b) month and year of installation of each such machine,
    (c) maximum revolutions per minute which each such machine is capable of working at, and
    (d) metre length of each such machine;

and shall, on demand, produce before such officer all his records and accounts to enable that officer to verify the statement so filed. After the proper officer has completed the verification, the sum payable under sub-rule (1) in respect of such period shall be calculated by application of the appropriate rate to the metre length of all the machines employed by the manufacturer in each of the shifts during that period; and such sum shall be paid by the manufacturer in one lump sum into the Government treasury.

(6) In this rule-

    (a)"metre length", in relation to a machine, means the distance between the points provided for the first needle and the last needle of only one roller of such machine;

    (b) "shift" means a period not exceeding eight hours working in a day, exclusive of rest interval, provided the work of the same kind is carried out by the same set of workers.

96ZJ. Manufacturer"s declaration and accounts.-
(1) Such manufacturer shall keep account-current with the Commissioner, in the proper form, of the sums payable under rule 96ZI; such account-current shall be maintained in triplicate by using indelible pencil and double-sided carbon and the assessee shall periodically make credit in such account-current by cash payment into the treasury so as to keep the balance in such account-current sufficient to cover the sums payable under rule 96ZI for the day.

(2) Such manufacturer shall also-

    (a) maintain a daily account in the proper form in triplicate (by using indelible pencil and double-sided carbon) of the number, year of installation, speed and metre length of the machines actually employed by him in. each shift in the production of the embroidery, and other particulars;

    (b) inform the proper officer in writing of any change in the number, metre length and speed of the machines installed by him;

(c) append to his monthly return in Form R.T.3 made under rule 54, two duly signed carbon copies of the account maintained under this rule.
Form:R.G.25(13KB)

96ZK. Exemption from certain provisions; no rebate of excise duty on export.-
(1) During the period in respect of which any manufacturer has been permitted to avail himself of the provisions of this section, he shall be exempt from the operation of all the provisions of rule 9 except the third proviso to sub-rule (1) thereof and rules 47, 49,50, 51, 51A, 52,52A, 53, 55, 223, 223A, 223B, 224, 224A and 229.

(2) Except in accordance with such special terms, conditions and limitations as the Central Board of Excise and Customs may thereafter by notification specify in this behalf, no rebate of excise duty shall be paid under rule 12 in respect of any embroidery exported out of India out of the stock produced by such manufacturer during such period.

96ZL. Omitted
96ZM. Power to condone failure to apply for special procedure.-
Not-withstanding anything contained in this section, the Commissioner may, at his discretion and subject to such conditions as he may lay down, apply the provisions contained in this section to a manufacturer who has failed to avail himself of the special procedure, or to comply with any condition, laid down in this section within the prescribed time-limit.

E-X. PATENT OR PROPRIETARY MEDICINES

96ZN. Markings on labels.-
(1) There shall be marked on the label and container of each drug or medicinal preparation which is sought to be classified under sub-heading No. 3003.20 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) by reason of such drug or medicinal preparation bearing on itself and its container a name which is specified in a monograph in a Pharmacopoeia, Formulary or other publications listed in the Note 2(ii) to Chapter 30 of the said Schedule and by reason of such drug or medicinal preparation being classified under the said sub-heading by virtue of any other criteria laid down in the said Note -

    (i) if such name is specified in the latest edition of such Pharmacopoeia, Formulary or other publications, the recognised abbreviation for the relevant Pharmacopoeia, Formulary or other publications, such as I.P., B.P., U.S.P.;

    (ii) if such name is specified in any earlier edition of such Pharmacopoeia, Formulary or other publications, the recognised abbreviation and the year of publication or number of edition or revision of the relevant Pharmacopoeia, Formulary or other publications, such as I.P. 1955, B.P. 1958, U.S.P. XV.

(2) The markings specified in clauses (i) and (ii) shall be mentioned immediately after the name of the drug or medicinal preparation.

E-XA.- PROCESSED TEXTILE FABRICS

96 ZNA. Application to avail of special procedure.-

(1) Where an independent processor of textile fabrics, who is engaged exclusively in the manufacture or production of processed textile fabrics falling under heading Nos. 52.07, 52.08, 52.09, 54.06, 54.07, 55.11, 55.12, 55.13 or 55.14, or processed textile fabrics of cotton or man-made fibres, falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12, 6001.22, 6001.92, 6002.20, 6002.30, 6002.43, or 6002.93 (hereinafter in this section referred to as the "said goods") of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), with the aid of a hot-air stenter (hereinafter in this section referred to as "independent textile processor"), makes in the proper form, an application to the Commissioner, in this behalf, the special provisions contained in this section shall, on such application being granted by the Commissioner, apply to such independent textile processor in respect of the said goods in substitution of the provisions contained elsewhere than in this section, subject to such conditions and limitations as hereinafter laid down.

(2) The independent textile processor, who wants to avail the special provisions contained in this section for the period from 1st May, 2001 to 31st March, 2002, in respect of his processing factory existing as on the 1st May, 2001, shall make the application to the Commissioner of Central Excise in the prescribed format, by the 20th May, 2001. If such application made by the 20th May, 2001, is granted by the Commissioner of Central Excise, the facility to avail the provisions under this section shall be deemed to be available from 1st May, 2001. Pending grant of such application by the Commissioner of Central Excise, the independent textile processor may avail the provisions of this section on a provisional basis. However, if the application is rejected by the Commissioner of Central Excise, then he shall not be eligible to avail the provisions of this section from the 1st May, 2001 and he shall discharge the duty liability as per the provisions contained elsewhere than in this section and the duty , if any, paid under the provisions of this section or the notifications issued thereunder, shall be adjusted against the duty payable on such goods.

Provided that an independent textile processor commencing production for the first time in a new processing factory coming into existence after the 1st May, 2001, shall make the application prior to the commencement of commercial production so as to cover the period upto 31st March, 2002.

Explanation I.-For the purposes of this section, " independent textile processor" means a manufacturer who undertakes bleaching, dyeing or printing or any one or more of these processes with the aid of power or steam and who also has the facility in his factory (including plant and equipment) for carrying out heat setting or drying , with the aid of power or steam exclusively in a hot air stentor and who has no proprietory interest in any factory primarily and substantially engaged in the spinning of yarn or weaving or knitting of fabrics, on or after the 1st day of May, 2001.

Explanation II.-For the removal of doubt, it is hereby clarified that the provisions of this section shall not apply to an independent processor who carries out heat setting or drying with the aid of an open-air stenter installed in his factory.

96 ZNB. Conditions for availing of special procedure.-

(1) The original value of the investment in the plant and machinery installed in the factory of the independent textile processor of the said goods, as on the 1st March, 2001 or on the 1st of May, 2001, whichever is higher, for an existing factory of the independent textile processor or on the date of making the application under rule 96ZNA in the case an independent textile processor commencing production for the first time in a new factory coming into existence after the 1st of May, 2001, shall not exceed three crore rupees, irrespective of whether such plant and machinery is in use or not, or is in working condition or not, and the independent textile processor shall declare the original value of investment in such plant and machinery installed in his factory, on the dates mentioned above, in the prescribed format duly certified by a Chartered Accountant or Cost Accountant. The Commissioner of Central Excise may require any such documentary evidence as he considers appropriate in respect of such original value before granting the application.

(2) If any additional plant and machinery is installed by the independent textile processor at any point of time, he shall intimate the same to the Commissioner of Central Excise within 7 days of such installation and the original value of investment in plant and machinery together with the original value of investment in such additional plant and machinery shall not exceed three crore rupees. Where such original value of investment exceeds the limit of three crore rupees, the provisions of this section shall not apply from the first day of the month in which such investment exceeded the said limit of three crore rupees.

(3) The independent textile processor shall not remove any unstentored textile fabrics from his factory.

(4) An independent textile processor of the said goods who has made the application under rule 96ZNA to pay the sum of duty in accordance with rule 96ZNC shall not be allowed any abatement on account of closure of factory, except as provided under rule 96ZND.

(5) The independent textile processor opting for the provisions of this section shall not be eligible to avail of any credit of duty paid on inputs or capital goods under these Rules or any notification issued thereunder.

(6) The provisions of this section shall apply to the said goods which are manufactured or produced on or after the 1st day of May, 2001.

(7) Nothing contained in this section shall apply to-

  1. the said goods which are manufactured or produced prior to the 1st day of May, 2001 and cleared on or after that date;

  2. a composite mill, i.e., a manufacturer or processor, who is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the factory and includes a multi-locational composite mill, i.e., a public limited company which is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics in one or more factories owned by the same public limited company; or

  3. fabrics other than the said goods produced or manufactured by the independent textile processor.

96ZNC. Discharge of liability for duty on payment of certain sum, etc.-
(1) Having regard to the average production of the said goods per month per chamber of a hot-air stenter installed for the processing of the said goods and any other relevant factor, the Central Government may, by notification in the Official Gazette, fix, from time to time, the rate of duty per such chamber of a hot-air stenter per month, subject to such conditions and limitations as it may think fit to impose, and may fix different rates for different varieties of the said goods; and if a manufacturer whose application has been granted under rule 96ZNA pays a sum calculated according to such rate of duty in the manner and subject to the conditions and limitations hereinafter laid down or in any notification issued under any of the provisions of this section, such payment shall be a full discharge of his liability for duty leviable on his production of the said goods during the period for which the said sum has been paid:

Provided that if there is any alteration in the rates of duty, the sum payable shall be recalculated on the basis of the revised rates, from the date of alteration and liability for duty leviable on the production of the said goods from that date shall not be discharged unless the differential duty is paid, and where the amount of duty so recalculated, is less than the sum paid, the balance shall be refunded to the manufacturer:

(2) The sum payable under sub-rule (1) read with any notification issued thereunder shall be debited by the independent textile processor in the account current maintained by him under sub-rule (1) of rule 173 G of the Central Excise Rules, 1944.

(3) Fifty per cent. of the sum payable for a calendar month under sub-rule (1) read with any notification issued thereunder shall be paid by the 20th of that month and the remaining sum shall be paid by the 5th of the immediately succeeding month.

(4) The independent textile processor shall maintain records, and file returns, pertaining to production or manufacture, clearance, storage, delivery or disposal of goods, including the materials received for or consumed in the manufacture of the said goods or other goods, the goods and materials in stock with him and the duty paid by him, as prescribed under these Rules or any notification issued thereunder:

Provided that the independent textile processor of the said goods shall further declare in the monthly return required to be filed under these Rules that the original value of investment in the plant and machinery installed in his factory for the month to which the said return pertains has not exceeded three crore rupees.

(5) If an independent textile processor fails to pay the sum under sub-rule (1) or any part thereof by the date specified in sub-rule(3), he shall be liable to,-

    (i) pay the outstanding sum along with interest at the rate of twenty-four per cent. per annum calculated for the outstanding period on the outstanding sum; and

    (ii) a penalty equal to the sum outstanding from him for a month payable by the 5th of the succeeding month or rupees five thousand, whichever is greater.

(6) If an independent textile processor removes the said goods without complying with any of the requirements contained in sub-rule (4), then, the said goods shall be liable to confiscation and the independent textile processor shall be liable to a penalty not exceeding ten thousand rupees.

96 ZND. Procedure for claiming abatement.-
(1) Where an independent textile processor does not produce or manufacture the said goods during any continuous period of not less than fifteen days may claim abatement of the sum payable by him under rule 96 ZNC read with any notification issued thereunder, and such abatement shall be allowed by an order passed by the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, of such amount as may be specified in such order, subject to fulfilment of the following conditions, namely:-
  1. the abatement shall be applicable only on complete closure of the factory and not on closure of any one or more hot-air stenters;

  2. during the period of closure no manufacturing activity, whatsoever, including bleaching, dyeing or printing, in respect of the said goods shall be undertaken and no removal of the said goods shall be effected by the independent textile processor;

  3. the independent textile processor shall inform, in writing, about the closure of the factory to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three days prior to the date of closure;

  4. the stenter or stenters shall be sealed in such manner as may be prescribed by the Commissioner of Central Excise;

  5. the independent textile processor, when he starts production again, shall inform in writing about the date of starting of production to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three days prior to the date of starting production, and get the seal opened in such manner as may be specified by the Commissioner of Central Excise before recommencing production;

  6. the independent textile processor shall, while sending information under condition (e), declare that his factory remained closed for a continuous period starting from the hour and date to the hour and date, such hours and dates to be specified in the declaration;

     

    fa. when the claim for abatement by the independent textile processor is for a period of less than one month, he shall be required to pay the duty, as applicable, for the entire period of the month and may subsequently seek such claim after payment of such duty;

     

    fb. where the claim for abatement by the independent textile processor is for a period of one month or more, he shall not be required to pay the duty for that period in advance;

  7. if the claim for abatement by the independent textile processor has been disallowed by the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, by a written order made in this regard, the independent textile processor shall pay the sum of duty, and interest if any applicable, prior to getting the stenter or stenters sealed under condition (d ) reopened for resuming production;

Provided that the Joint Commissioner of Central Excise or the Additional Commissioner of Central Excise, as the case may be, where he is satisfied that the delay in giving information under condition (c) was caused due to unavoidable circumstances, may, for reasons to be recorded in writing, condone such delay.

E - XI NON ALLOY STEEL INGOTS AND BILLETS/ HOT RE-ROLLED PRODUCTS

96ZO. Omitted. 
96ZP. Omitted.

E. XIA. PROCESSED TEXTILE FABRICS

96ZQ. Omitted.
96ZR. to 96ZUU. Omitted

E-XII. CEMENT

96ZV. Damaged cement may be returned for reprocessing or for further manufacture to the original factory of production or to any other cement factory.-
Cement, which has been damaged after deposit in the storeroom of the approved premises, of a factory or after its delivery on payment of duty, may be returned to the same or any other cement factory to be re-processed or for further manufacture, and, where duty has been paid on such cement, its equivalent to the recoverable weight of the reprocessed cement based on the chemical analysis of the damaged cement may be delivered without payment of duty:

        Provided that -

    (i) information of the receipt of each consignment of damaged cement into the receiving factory is given in writing by the manufacturer to the proper officer twenty-four hours before such receipt;

    (ii) the damaged cement received in the receiving factory is stored separately unless otherwise permitted by the Commissioner by an order in writing and such goods before being taken for reprocessing or for further manufacture are made available to the proper officer for inspection and for drawal of samples;

    (iii) a detailed account of the cement damaged in the store-room or, as the case may be, of its delivery on payment of duty and the processes to which it is subjected, is kept in the factory records:

        Provided further that the provisions of this rule shall not apply to cement manufactured,

    (i) in a free trade zone and returned to a cement factory in any other place in India; or
    (ii) by a hundred per cent export-oriented undertaking and returned to another cement: factory in any place in India.

E-XIII. - Marble slabs

96ZW. to 96ZZZZ Omitted

F. REFUNDS
GENERAL

97. Refund of duty on goods returned to factory.-
(1) The Commissioner may grant refund of the duty paid on manufactured excisable goods issued for home consumption from a factory which are returned to the same or any other factory for being remade, refined, reconditioned, or subjected to any other similar process in the factory:

Provided that-

    (i) the goods are returned to the factory within one year of the date of payment of duty or within such further period or periods not exceeding one year in the aggregate as the Commissioner may, on sufficient cause being shown, permit in any particular case;

    (ii) at least 48 hours notice, or in exceptional circumstances beyond the control of the manufacturer a shorter notice, of the re-entry
of excisable goods into the factory is given to the proper officer before the goods are received into the factory:

        Provided further that where the proper officer is not on duty at the time, of the receipt of the. goods into the factory, the manufacturer stores the goods separately and reports full details of the goods to the proper officer as soon as it is possible to do so;

    (iii) the goods are presented, before they are taken into stock, to the proper officer for inspection, and if necessary, for taking samples;

    (iv) the goods are identified to the satisfaction of the Commissioner;

    (v) the majority of the unit or smallest packages, as the case may be, meant for retail sale are intact and unopened, and in the case of opened packages, the goods are identified, to the satisfaction of the Commissioner, on the basis of marking on the individual articles or containers and on other collateral evidence, if any:

        Provided that the opened packages shall not be admitted in respect of commodities with concessional rates of duty or partial exemption for the small or cottage sector, as set forth in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or by a notification issued under rule 8 or section 5A of the Act;

    (vi) the value of the goods at the time of their return to the factory is in the opinion of the Commissioner not less than the amount of duty originally paid upon them at the time of their clearance from the factory.

    Explanation.-In this clause, "value" means the market value of the excisable goods and not the ex-duty value thereof.

    (vii) the amount of refund payable on the goods is not less than Rupees fifty;

    (viia) the amount of refund payable shall in no case be in excess of the duty payable on such goods after being re-made, refined, reconditioned or subjected to any other similar process in the factory;

    (viii) a detailed account of the returned goods, and the processes to which they are subjected after their return to the factory, is kept in the factory records; and

    (ix) the manufacturer proves to the satisfaction of the Commissioner that the defect or deterioration resulted from defective manufacture or storage or due to some accident while in transit, and that the goods have not been made use of in any manner except for trial purpose:

        Provided further that no refund shall be admissible in respect of the duty paid

        (a) on goods which are disposed of in any manner other than for production of goods of the same class,

        (b) on the unmanufactured tobacco from which cigars, cheroots, cigarettes, chewing tobacco, snuff or biris so returned to the factory have been produced,

        (c) on cigarattes.

(2) No refund under sub-rule (1) shall be paid until the processes mentioned therein have been completed and an account under clause (viii) of the first proviso thereof has been rendered to the satisfaction of the Commissioner within six months of the return of
the goods to the factory:

        Provided that the Central Government may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund.

(3) The provisions of this rule shall not apply to excisable goods manufactured,-

    (i) in a free trade zone and returned to a factory in any other place in India; or

    (ii) by a hundred per cent export-oriented undertaking and returned to another factory in any place in India.

97A. Goods cleared for export may be allowed to be returned to factory.-
(1) The Commissioner may allow manufactured excisable goods cleared for export under claim for rebate or in bond, but not exported for any reason, to be returned to the same or any other factory for being remade, refined, reconditioned, or subjected to other similar process in the factory, provided that-

    (i) the goods are returned to the factory within one year of the date of payment of duty or within such further period or periods not exceeding six months in the aggregate as the Commissioner may, on sufficient cause being shown, permit in any particular case;

    (ii) at least 48 hours notice is given to the proper officer before the goods are received into the factory;

    (iii) the goods are presented, before they are taken into stock to the proper officer for inspection, and if necessary, for taking samples;

    (iv) the goods are identified to the satisfaction of the Commissioner;

    (v) the goods, as originally issued from the factory are not found to have been tampered with in any way, and the smallest packages meant for retail sale are intact and unopened;

    (vi) the value of the goods at the time of their return to the factory is in the opinion of the Commissioner not less than the amount of duty originally paid upon them or covered by the bond entered into by the owner under rule 13 at the time of their clearance from the factory;

    Explanation.-In this clause "value" means the market value of the excisable goods and not the ex-duty value thereof;

    (vii) the amount of, duty originally paid or covered by the bond is not less than rupees fifty; and

    (viii) a detailed account of the returned goods, and the processes to which they are subjected after their return to the factory is kept in the factory records.

(2)    (i) No refund shall, however, be admissible in respect of the duty paid-

        (a) on goods which are disposed of in any manner otherwise than for production of goods of the same class;

        (b) on the unmanufactured tobacco from which cigars, cheroots, cigarettes, chewing tobacco, snuff or biris, so returned to the factory have been produced.

    (ii) No refund shall be paid until the processes mentioned in sub-rule (1) have been completed, and an account under clause (viii) of the proviso thereto has been rendered, to the satisfaction of the Commissioner within six months of the return of the goods to the factory:

        Provided that the Central Government may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund.

(3) Where the goods were cleared for export in bond, full duty shown on the clearance document shall be recovered if such goods are disposed of in any manner otherwise than for production of goods of the same class.

(4) After the processes mentioned in sub-rule (1) have been completed, the goods shall be cleared subject to the procedure prescribed in these rules in this regard.

(5) The provisions of this rule shall not apply to excisable goods manufactured,-

    (i) in a free trade zone and returned to a factory in any other place in India; or

    (ii) by a hundred per cent export-oriented undertaking and returned to another factory in any place in India.

97B. Excisable goods exported may be allowed to be returned to the factory.-
Exported excisable goods which are re-imported for carrying out-

(a) repairs,

(b) re-conditioning,

(c) refining,

(d) re-making, or

(e) subjecting to any process similar to the process referred to in clauses (a) to (d),

may be returned to the factory of manufacture for carrying out the said processes and subsequent re-export subject to such conditions and procedure as shall be prescribed by the Commissioner in this regard:

        Provided that any waste or refuse arising as a result of the said process shall be destroyed or otherwise disposed of in the manner and in accordance with the conditions as may be prescribed by the Commissioner by a general or special order and thereupon the proper officer may remit the duty on such waste or refuse.

98. Goods not affixed with Central Excise Stamps and unlabelled goods removed for export may be returned to the factory.-
Where goods to which Central Excise Stamps or excise labels have not been affixed are removed for export out of India, whether under claim for rebate of duty under rule 12 or under bond, as provided in rule 13, such goods may, subject to the approval of the proper officer, be returned to the factory if for any reason they are not exported. The manufacturer shall produce to the officer at the factory the application under which the consignment was originally removed for export and if the officer is satisfied that the consignment is identical with the one described in the application, he shall permit it to be taken into the storeroom. The manufacturer shall then be entitled to refund of the duty, if any, paid on the consignment and no deduction will be made on account of any goods in the consignment which may have become unserviceable.
99. Refund of purchase price of unused or damaged Central Excise Stamps.-
(1) A manufacturer may obtain a refund of the purchase price of unused Central Excise Stamps or labels on returning them to the proper officer:

        Provided that where a manufacturer ceases to manufacture goods, or a particular tariff category of goods, no refund shall be granted unless a written claim therefor is lodged with, and such Central Excise Stamps or labels are also returned to the proper officer within three months from the date of such cessation.

(2) A manufacturer may obtain a refund of the purchase price of any Central Excise Stamps or labels accidently rendered unfit for use or of any Central Excise Stamps torn in the course of examination under rule 72, or the test-check under rule 73, or of reconditioning as provided in rule 79, if the proper officer is satisfied that the damaged Central Excise Stamp or label has not been used previously and that in the case of Central Excise Stamps, the first figure of the number of matches printed thereon has not been damaged or torn.

(3) If any goods contained in packages to which Central Excise Stamps or labels have been affixed are proved to the satisfaction of the proper officer to have become unserviceable before they are issued from a factory, such officer may permit the packages with their contents to be destroyed under excise supervision and the manufacturer shall receive a refund of the purchase price of the Central Excise Stamps or labels so destroyed.

100. Refund of duty on sugar received for refining.-
Any manufacturer, who receives into his factory for the purpose of further refinement or manufacture, sugar on which duty has been paid, shall, on production of satisfactory evidence before the Commissioner that the duty has been paid in respect of such sugar, receive a refund of that duty:

        Provided that the provisions of this rule shall not apply to sugar manufactured,-

    (i) in a free trade zone and received by a factory in any other place in India; or

    (ii) by a hundred per cent export-oriented undertaking, and received by to another factory in any place in India.