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Cenvat Credit Rules, 2004
[Notification
No. 23/2004-C.E. (N.T.) dated 10.09.2004 as amended by
24/2004-C.E. (N.T.) dated 17.09.2004, 38/2004-C.E. (N.T.) dated 25.11.2004,
03/2005-C.E. (N.T.) dated 28.01.2005, 13/2005-C.E. (N.T.) dated 01.03.2005,
22/2005-C.E. (N.T.) dated 13.05.2005, 27/2005-C.E. (N.T.) dated 16.05.2005,
28/2005-C.E. (N.T.) dated 07.06.2005, 06/2006-C.E. (N.T.) dated 20.03.2006,
08/2006-C.E. (N.T.) dated 19.04.2006, 10/2006-C.E. (N.T.) dated 25.04.2006,
19/2006-C.E. (N.T.) dated 30.09.2006, 31/2006-C.E. (N.T.) dated
30.12.2006,
07/2007-C.E.(N.T.) dated 21.02.2007, 10/2007-C.E.(N.T.) dated 01.03.2007,
19/2007-C.E.(N.T.) dated 09.03.2007, 24/2007-C.E.(N.T.) dated 25.04.2007,
27/2007-C.E.(N.T.) dated 12.05.2007, 32/2007-C.E.(N.T.) dated 03.08.2007,
33/2007-C.E.(N.T.) dated 07.09.2007, 35/2007-C.E.(N.T.) dated 14.09.2007,
10/2008-C.E. (N.T.) dated 01.03.2008, 35/2008-C.E. (N.T.) dated 24.09.2008,
48/2008-C.E. (N.T.) dated 05.12.2008, 50/2008-C.E. (N.T.) dated 31.12.2008,
16/2009-C.E. (N.T.) dated 07.07.2009, 22/2009-C.E. (N.T.) dated 07.09.2009,
and 6/2010-C.E. (N.T.) dated 27.02.2010]
In exercise of the powers conferred by section 37 of the Central Excise Act,
1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994) and in
supersession of the CENVAT Credit Rules, 2002 and the Service Tax Credit Rules,
2002, except as respects things done or omitted to be done before such
supersession, the Central Government hereby makes the following rules, namely:-
Rule 1. Short title, extent and commencement. -(1)
These rules may be called the CENVAT Credit (Amendment) Rules, 2010.
(2) They shall come into force on the date of their publication in the Official
Gazette.
Rule 2. Definitions. - In these rules, unless
the context otherwise requires,-
(a) "capital goods" means:-
(A)
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the following goods, namely:-
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(i)
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all goods falling under Chapter 82, Chapter
84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like,
and parts thereof falling under heading 6804 of the First Schedule to the
Excise Tariff Act;
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(ii)
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pollution control equipment;
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(iii)
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components, spares and accessories of the
goods specified at (i) and (ii);
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(iv)
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moulds and dies, jigs and fixtures;
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(v)
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refractories and refractory
materials;
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(vi)
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tubes and pipes and fittings thereof; and
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(vii)
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storage tank, used-
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(1) in the factory of the manufacturer of the
final products, but does not include any equipment or
appliance used in an office; or
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(2) for providing output service;
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(B)
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motor vehicle registered in the name of
provider of output service for providing taxable service as specified in
sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance
Act;
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(b) Customs Tariff Act" means the Customs
Tariff Act, 1975 (51 of 1975);
(c) "Excise Act" means the Central
Excise Act, 1944 (1 of 1944);
(d) "exempted goods" means excisable
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;
(e) "exempted services" means taxable
services which are exempt from the whole of the service tax leviable thereon,
and includes services on which no service tax is leviable under section 66 of
the Finance Act;
(f) "Excise Tariff Act" means the
Central Excise Tariff Act, 1985 (5 of 1986);
(g) "Finance Act" means the Finance
Act, 1994 (32 of 1994);
(h) "final products" means excisable
goods manufactured or produced from input, or using input service;
(ij) "first stage dealer" means a
dealer, who purchases the goods directly from,-
| (i) the manufacturer under the cover of an invoice
issued in terms of the provisions of Central Excise Rules, 2002 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 |
| (ii) 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; |
(k) "input" means-
| (i) all goods, except light diesel oil, 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 lubricating
oils, greases, cutting oils, coolants, 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
in or in relation to manufacture of final products or for any other
purpose, within the factory of production; |
| (ii) all goods, except light diesel oil, high
speed diesel oil, motor spirit, commonly known as petrol and motor
vehicles, used for providing any output service; |
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Explanation
1.- The light diesel
oil, high speed diesel oil or motor spirit, commonly known as petrol, shall
not be treated as an input for any purpose whatsoever.
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Explanation
2.-
Input include goods used in the manufacture of capital goods which are
further used in the factory of the manufacturer; but shall not include
cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo
Mechanically Treated bar (TMT) and other items used for construction of
factory shed, building or laying of foundation or making of structures for
support of capital goods;
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(l) "input service" means any
service,-
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(i)
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used by a provider of taxable service for
providing an output service; or
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(ii)
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used by the manufacturer, whether directly
or indirectly, in or in relation to the manufacture of final products and
clearance of final products upto the place of
removal,
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and includes services used in relation to
setting up, modernization, renovation or repairs of a factory, premises
of provider of output service or an office relating to such factory or
premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs,
activities relating to business, such as accounting, auditing,
financing, recruitment and quality control, coaching and
training, computer networking, credit rating, share registry, and security,
inward transportation of inputs or capital goods and outward transportation upto the place of removal;
(m) "input service distributor" means
an office of the manufacturer or producer of final products or provider of
output service, which receives invoices issued under rule 4A of the Service
Tax Rules, 1994 towards purchases of input services and issues invoice, bill
or, as the case may be, challan for the purposes of distributing the credit
of service tax paid on the said services to such manufacturer or producer or
provider, as the case may be;
(n) "job work" means processing or
working upon of raw material or semi-finished goods supplied to the job
worker, so as to complete a part or whole of the process resulting in the
manufacture or finishing of an article or any operation which is essential
for aforesaid process and the expression "job worker" shall be
construed accordingly;
(na) "large
taxpayer" shall have the meaning assigned to it in the Central Excise
Rules, 2002.
(naa) "manufacturer" or "producer" in relation to
articles of jewellery falling under heading 7113 of
the First Schedule to the Excise Tariff Act, includes a person who is liable to
pay duty of excise leviable on such goods under sub-rule (1) of rule 12AA of
the Central Excise Rules, 2002;
(o) "notification" means the
notification published in the Official Gazette;
(p) "output service" means any
taxable service, excluding the taxable service referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act,
provided by the provider of taxable service, to a customer, client,
subscriber, policy holder or any other person, as the case may be, and the
expressions 'provider' and 'provided' shall be construed accordingly;
(q) "person liable for paying service
tax" has the meaning as assigned to it in clause (d) of sub-rule (1) of
rule 2 of the Service Tax Rules, 1994;
(r) "provider of taxable service"
include a person liable for paying service tax;
(s) "second stage dealer" means a
dealer who purchases the goods from a first stage dealer;
(t) words and expressions used in these rules and
not defined but defined in the Excise Act or the Finance Act shall have the
meanings respectively assigned to them in those Acts.
Rule 3. CENVAT credit. -(1) A manufacturer or producer
of final products or a provider of taxable service shall be allowed to take
credit (hereinafter referred to as the CENVAT credit) of -
(i)
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the duty of excise specified in the First Schedule
to the Excise Tariff Act, leviable under the Excise Act;
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(ii)
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the duty of excise specified in the Second
Schedule to the Excise Tariff Act, leviable under the Excise Act;
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(iii)
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the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Textile and Textile Articles)
Act,1978 ( 40 of 1978);
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(iv)
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the additional duty of excise leviable
under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, 1957 ( 58 of 1957);
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(v)
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the National Calamity Contingent duty
leviable under section 136 of the Finance Act, 2001 (14 of 2001);
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(vi)
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the Education Cess on excisable goods
leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004
(23 of 2004);
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(via)
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the Secondary and Higher Education Cess on
excisable goods leviable under section 136 read with section 138 of the
Finance Act, 2007 (22 of 2007);
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(vii)
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the additional duty leviable under section
3 of the Customs Tariff Act, equivalent to the duty of excise specified
under clauses (i), (ii), (iii), (iv), (v) (vi) and (via);
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(viia)
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the additional duty leviable under
sub-section (5) of section 3 of the Customs Tariff Act,
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Provided that a provider of taxable service
shall not be eligible to take credit of such additional duty;
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(viii)
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the additional duty of excise leviable
under section 157 of the Finance Act, 2003 (32 of 2003);
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(ix)
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the service tax leviable under section 66
of the Finance Act;
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(x)
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the Education Cess on taxable services
leviable under section 91 read with section 95 of the Finance (No.2) Act,
2004 (23 of 2004); and
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(xa)
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the Secondary and Higher Education Cess on
taxable services leviable under section 136 read with section 140 of the
Finance Act, 2007 (22 of 2007); and
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(xi)
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the additional duty of excise leviable
under section 85 of Finance Act, 2005 (18 of 2005 )
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Provided that the CENVAT credit shall be
allowed to be taken of the amount equal to central excise duty paid on the
capital goods at the time of debonding of the unit
in terms of the para 8 of notification No.
22/2003-Central Excise, published in the Gazette of India, part II, Section
3,sub-section(i),vide number G.S.R. 265(E), dated, the 31st March,2003.
paid on-
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(i)
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any input or capital goods received in the
factory of manufacture of final product or premises of the provider of output
service on or after the 10th day of September, 2004; and
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(ii)
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any input service received by the
manufacturer of final product or by the provider of output services
on or after the 10th day of September, 2004,
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including the said duties, or tax, or cess paid on any input or input service, as the case may
be, 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 G.S.R. 547 (E), dated the 25th March, 1986, and received by the
manufacturer for use in, or in relation to, the manufacture of final product, on
or after the 10th day of September, 2004.
Explanation.- For the removal of
doubts it is clarified that the manufacturer of the final products and the
provider of output service shall be allowed CENVAT credit of additional duty
leviable under section 3 of the Customs Tariff Act on goods falling under
heading 9801 of the First Schedule to the Customs Tariff Act. (2) 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 manufactured by the said manufacturer or producer cease to be
exempted goods or any goods become excisable. (3) Notwithstanding anything contained
in sub-rule (1), in relation to a service which ceases to be an exempted
service, the provider of the output service shall be allowed to take CENVAT
credit of the duty paid on the inputs received on and after the 10th day of
September, 2004 and lying in stock on the date on which any service ceases to
be an exempted service and used for providing such service. (4) The CENVAT credit may be utilized
for payment of -
a) any duty of excise on any final
product; or
b) an amount equal to CENVAT credit
taken on inputs if such inputs are removed as such or after being partially
processed; or
c) an amount equal to the CENVAT credit
taken on capital goods if such capital goods are removed as such; or
d) an amount under sub rule (2) of rule
16 of Central Excise Rules, 2002; or
e) service tax on any output service:
Provided that while paying duty of excise or service tax, as the
case may be, the CENVAT credit shall be utilized only to the extent such credit
is available on the last day of the month or quarter, as the case may be, for
payment of duty or tax relating to that month or the quarter, as the case may
be:
Provided further that the CENVAT
credit of the duty, or service tax, paid on the inputs, or input services, used
in the manufacture of final products cleared after availing of the exemption
under the following notifications of Government of India in the Ministry of
Finance (Department of Revenue),-
(i)
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No. 32/99-Central Excise, dated the 8th
July, 1999 [G.S.R. 508(E), dated 8th July, 1999];
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(ii)
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No. 33/99-Central Excise, dated the 8th
July, 1999 [G.S.R. 509(E), dated 8th July, 1999];
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(iii)
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No. 39/2001-Central Excise, dated the 31st
July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001];
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(iv)
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No. 56/2002-Central Excise, dated 14th
November, 2002 [G.S.R. 764(E), dated the 14th November, 2002];
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(v)
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No. 57/2002-Central Excise, dated 14th November,
2002 [G.S.R.. 765(E), dated the14th November, 2002];
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(vi)
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No. 56/2003-Central Excise, dated the 25th
June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003]; and
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(vii)
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No. 71/2003-Central Excise, dated the 9th
September, 2003 [G.S.R. 717 (E), dated the 9th Sep, 2003]
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shall, respectively, be
utilized only for payment of duty on final products, in respect of which
exemption under the said respective notifications is availed of :
Provided also that no credit of the additional duty leviable under
sub-section (5) of section 3 of the Customs Tariff Act,
shall be utilized for payment of service tax on any output service:
Provided also that the CENVAT credit of any duty specified in
sub-rule (1), except the National Calamity Contingent duty in item (v) thereof,
shall not be utilized for payment of the said National Calamity Contingent duty
on goods falling under tariff items 8517 12 10 and 8517 12 90 respectively of
the First Schedule of the Central Excise Tariff:
Provided also that the CENVAT
credit of any duty mentioned in sub-rule (1), other than credit of additional
duty of excise leviable under section 85 of Finance Act, 2005 (18 of 2005 ),
shall not be utilised for payment of said additional
duty of excise on final products.
(5) When inputs or capital goods, on which CENVAT credit has been taken, are
removed as such from the factory, or premises of the provider of output
service, the manufacturer of the final products or provider of output service,
as the case may be, shall pay an amount equal to the credit availed in respect
of such inputs or capital goods and such removal shall be made under the cover
of an invoice referred to in rule 9:
Provided that such payment shall not be required to be made where
any inputs or capital goods are removed outside the premises of the provider of
output service for providing the output service :
Provided further that if the capital goods, on which CENVAT Credit
has been taken, are removed after being used, the manufacturer or provider of
output services shall pay an amount equal to the CENVAT Credit taken on the
said capital goods reduced by the percentage points calculated by straight line
method as specified below for each quarter of a year or part thereof from the
date of taking the CENVAT Credit, namely:-
(a) for
computers and computer peripherals:
for each quarter in the first year @ 10%
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for each quarter in the second year @ 8%
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for each quarter in the third year @5%
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for each quarter in the fourth and fifth
year @1%
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(b) for capital goods, other than computers
and computer peripherals @ 2.5% for each quarter.
(5A) If the capital goods are cleared as waste and scrap, the manufacturer
shall pay an amount equal to the duty leviable on transaction value.
(5B) If the value of any,
(i) input, or
(ii) capital goods before being
put to use,
on which CENVAT credit has been taken is written off fully or where any
provision to write off fully has been made in the books of account, then the
manufacturer or service provider, as the case may be, shall pay an amount
equivalent to the CENVAT credit taken in respect of the said input or capital
goods:
Provided that if the said input or capital goods is subsequently
used in the manufacture of final products or the provision of taxable services,
the manufacturer or output service provider, as the case may be, shall be
entitled to take the credit of the amount equivalent to the CENVAT credit paid
earlier subject to the other provisions of these rules.
(5C) Where on
any goods manufactured or produced by an assessee, the payment of duty is
ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the
CENVAT credit taken on the inputs used in the manufacture or production of said
goods shall be reversed.
(6) The amount paid under sub-rule (5) and sub-rule (5A) shall be eligible as
CENVAT credit as if it was a duty paid by the person who removed such goods
under sub-rule (5) and sub-rule (5A).
(7) Notwithstanding anything contained in sub-rule (1) and sub-rule (4),-
(a)
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CENVAT credit in
respect of inputs or capital goods produced or manufactured, by a hundred per
cent. export-oriented undertaking or by a unit in an Electronic Hardware Technology
Park or in a Software Technology Park other than a unit which pays excise
duty levied under section 3 of the Excise Act read with serial numbers 3,5, 6
and 7 of notification No. 23/2003-Central Excise, dated the 31st March, 2003,
[G.S.R. 266(E), dated the 31st March, 2003] and used in the manufacture of
the final products or in providing an output service, in any other place in
India, in case the unit pays excise duty under section 3 of the Excise Act
read with serial number 2 of the notification No. 23/2003-Central Excise,
dated the 31st March, 2003, [G.S.R. 266(E), dated the 31st March, 2003],
shall be admissible equivalent to the amount calculated in the following
manner, namely:-
Fifty per cent. of [X multiplied by
{(1+BCD/100) multiplied by (CVD/100)}], where BCD and CVD denote ad
valorem rates, in per cent., of basic customs duty and additional duty of
customs leviable on the inputs or the capital goods respectively and X
denotes the assessable value:
Provided that the CENVAT credit in respect
of inputs and capital goods cleared on or after 1st March, 2006 from an
export oriented undertaking or by a unit in Electronic Hardware Technology
Park or in a Software Technology Park, as the case may be, on which such unit
pays excise duty under section 3 of the Excise Act read with serial number 2
of the notification no. 23/2003-Central Excise dated 31st March, 2003
[G.S.R. 266(E), dated the 31st March, 2003] shall be equal to {X multiplied
by [(1+BCD/200) multiplied by (CVD/100)]}.
Provided further that the CENVAT credit in
respect of inputs and capital goods cleared on or after the 7th September,
2009 from an export-oriented undertaking or by a unit in Electronic Hardware
Technology Park or in a Software Technology Park, as the case may be, on
which such undertaking or unit has paid -
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(A)
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excise duty leviable under section 3 of the
Excise Act read with serial number 2 of the notification no. 23/2003-Central
Excise, dated 31st March, 2003 [G.S.R. 266(E), dated the 31st March, 2003]; and
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(B)
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the Education Cess
leviable under section 91 read with section 93 of the Finance (No. 2) Act,
2004 and the Secondary and Higher Education Cess
leviable under section 136 read with section 138 of the Finance Act, 2007, on
the excise duty referred to in (A), shall be the aggregate of -
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(I)
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that portion of excise duty referred to in
(A), as is equivalent to -
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(i)
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the additional duty leviable under
sub-section (1) of section 3 of the Customs Tariff Act, which is equal to the
duty of excise under clause (a) of sub-section (1) of section 3 of the Excise
Act;
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(ii)
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the additional duty leviable under
sub-section (5) of section 3 of the Customs Tariff Act; and
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(II)
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the Education Cess and the Secondary and Higher
Education Cess referred to in (B).
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(b)
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CENVAT credit in respect of -
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(i)
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the additional duty of excise leviable
under section 3 of the Additional Duties of Excise (Textiles and
Textile Articles) Act, 1978 (40 of 1978);
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(ii)
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the National Calamity Contingent duty
leviable under section 136 of the Finance Act, 2001 (14 of
2001);
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(iii)
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the education cess
on excisable goods leviable under section 91 read with section 93 of the
Finance (No.2) Act, 2004 (23 of 2004);
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(iiia)
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the Secondary and Higher Education Cess on
excisable goods leviable under section 136 read with
section 138 of the Finance Act, 2007 (22 of 2007);
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(iv)
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the additional duty leviable under section
3 of the Customs Tariff Act, equivalent to the duty of excise
specified under items (i), (ii) and (iii) above;
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(v)
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the additional duty of excise leviable
under section 157 of the Finance Act, 2003 (32 of 2003);
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(vi)
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the education cess
on taxable services leviable under section 91 read with section 95 of the
Finance
(No.2) Act, 2004 (23 of 2004); and
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(via)
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the Secondary and Higher Education Cess on
taxable services leviable under section 136 read with
section 140 of the Finance Act, 2007 (22 of 2007); and
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(vii)
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the additional duty of excise leviable
under section 85 of Finance Act, 2005 (18 of 2005 ),
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shall be utilised
towards payment of duty of excise or as the case may be, of service tax
leviable under the said Additional Duties of Excise (Textiles and
Textile Articles) Act, 1978 or the National Calamity Contingent duty leviable
under section 136 of the Finance Act, 2001 (14 of 2001), or the education cess on excisable goods leviable under section 91 read
with section 93 of the said Finance (No.2) Act, 2004 (23 of 2004), or
the Secondary and Higher Education Cess on excisable goods
leviable under section 136 read with section 138 of the Finance Act,
2007 (22 of 2007) or the additional duty of excise leviable under
section 157 of the Finance Act, 2003 (32 of 2003), or the education cess on taxable services leviable under section 91
read with section 95 of the said Finance (No.2) Act, 2004 (23 of 2004), or
the Secondary and Higher Education Cess on taxable services leviable under
section 136 read with section 140 of the Finance Act, 2007 (22 of 2007), or
the additional duty of excise leviable under section 85 of the Finance Act,
2005 (18 of 2005) respectively, 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 or on any
output service:
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Provided that the credit of
the education cess on excisable goods and the
education cess on taxable services can be utilized,
either for payment of the education cess on
excisable goods or for the payment of the education cess
on taxable services:
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Provided further that the
credit of the Secondary and Higher Education Cess on excisable goods and the
Secondary and Higher Education Cess on taxable services can be utilized,
either for payment of the Secondary and Higher Education Cess on excisable
goods or for the payment of the Secondary and Higher Education Cess on
taxable services
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Explanation - For the removal
of doubts, it is hereby declared that the credit of the additional duty of excise
leviable under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, 1957 (58 of 1957) paid on or after the 1st day of April,
2000, may be utilised towards payment of duty of
excise leviable under the First Schedule or the Second Schedule to the Excise
Tariff Act.
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(c)
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the CENVAT credit, in respect of additional
duty leviable under section 3 of the Customs Tariff Act, paid on marble slabs
or tiles falling under tariff items 2515 12 20 and 2515 12 90 respectively of
the First Schedule to the Excise Tariff Act shall be allowed to the extent of
thirty rupees per square meter;
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Explanation.- Where the
provisions of any other rule or notification provide for grant of whole or part
exemption on condition of non-availability of credit of duty paid on any
input or capital goods, or of service tax paid on input service, the
provisions of such other rule or notification shall prevail over the
provisions of these rules.
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Rule 4.
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 or in the premises of
the provider of output service:
Provided that in respect of final products, namely, articles of jewellery falling under heading 7113 of the First Schedule
to the Excise Tariff Act, the CENVAT credit of duty paid on inputs may be taken
immediately on receipt of such inputs in the registered premises of the person
who get such final products manufactured on his behalf, on job work basis,
subject to the condition that the inputs are used in the manufacture of such
final product by the job worker.
(2) (a) The CENVAT credit in respect of capital goods
received in a factory or in the premises of the provider of output service
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:
Provided that the CENVAT
credit in respect of capital goods shall be allowed for the whole amount of the
duty paid on such capital goods in the same financial year if such capital
goods are cleared as such in the same financial year.
Provided further that the CENVAT credit of the
additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, in respect of capital goods shall be allowed immediately on receipt
of the capital goods in the factory of a manufacturer.
Provided also that where an assessee is eligible to avail of the
exemption under a notification based on the value of clearances in a financial
year, the CENVAT credit in respect of capital goods received by such
assessee shall be allowed for the whole amount of the duty paid on such capital
goods in the same financial year.
Explanation.- For the removal of
doubts, it is hereby clarified that an assessee shall be "eligible" if
his aggregate value of clearances of all excisable goods for home
consumption in the preceding financial year computed in the manner
specified in the said notification did not exceed rupees four hundred lakhs.
(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, or in the premises of the provider of output
service, if the capital goods, other than components, spares and
accessories, refractories and refractory
materials, moulds and dies and goods falling under heading 6805, grinding
wheels and the like, and parts thereof falling under heading 6804 of the First
Schedule to the Excise
Tariff Act, are in the possession of the manufacturer of final products, or
provider of output service in such subsequent years.
Illustration.- A manufacturer received machinery on the 16th day of
April, 2002 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 2002-2003, and the balance in subsequent years.
(3) The CENVAT credit in respect of the capital goods shall be allowed to a
manufacturer, provider of output service even if the capital goods are acquired
by him 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 or provider of output
service 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 for the manufacture of
intermediate goods necessary for the manufacture of final products or any other
purpose, and it is established from the records, challans
or memos or any other document produced by the manufacturer or provider of
output service taking the CENVAT credit that the goods are received back in the
factory within one hundred and eighty days of their being sent to a job worker
and if the inputs or the capital goods are not received back within one hundred
eighty days, the manufacturer or provider of output service shall pay an amount
equivalent to the CENVAT credit attributable to the inputs or capital goods by
debiting the CENVAT credit or otherwise, but the manufacturer or provider of
output service can take the CENVAT credit again when the inputs or capital
goods are received back in his factory or in the premises of the provider of
output service.
(b) The CENVAT credit shall also be allowed in respect of jigs, fixtures,
moulds and dies sent by a manufacturer of final products to,-
(i)
|
another manufacturer for the production of
goods; or
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(ii)
|
a job worker for the
production of goods on his behalf, according to his specifications.
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(6) The
Deputy Commissioner of Central Excise or the Assistant Commissioner of Central
Excise, as the case may be, having jurisdiction over the factory of the
manufacturer of the final products who has sent the input 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 input or
partially processed input, 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 final products to be cleared from the premises of the
job-worker.
(7) The CENVAT credit in respect of
input service shall be allowed, on or after the day which payment is made of
the value of input service and the service tax paid or payable as is indicated
in invoice, bill or, as the case may be, challan referred to in rule 9.
Rule 5.Refund of
CENVAT credit. -Where any input or input service is used in the
manufacture of final product which is cleared for export under bond or letter
of undertaking, as the case may be, or used in the intermediate product cleared
for export, or used in providing output service which is exported, the CENVAT
credit in respect of the input or input service so used shall be allowed to be
utilized by the manufacturer or provider of output service towards payment
of,
(i)
|
duty of excise on any final product cleared
for home consumption or for export on payment of duty; or
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(ii)
|
service tax on output service,
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and where for any reason such adjustment is
not possible, the manufacturer or the provider of output service shall be
allowed refund of such amount subject to such safeguards, conditions and
limitations, as may be specified, by the Central Government, by notification:
Provided that no refund of
credit shall be allowed if the manufacturer or provider of output service
avails of drawback allowed under the Customs and Central Excise Duties Drawback
Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in
respect of such duty; or claims rebate of service tax under the Export of
Service Rules, 2005 in respect of such tax.
Provided further that no
credit of the additional duty leviable under sub-section (5) of section 3 of the
Customs Tariff Act shall be utilised for payment of
service tax on any output service.
Explanation: For the purposes of
this rule, the words "output service which is exported" means the output
service exported in accordance with the Export of Services Rules, 2005.
Rule 5A. Refund of CENVAT credit to units in specified areas.-
Notwithstanding anything contrary contained in these rules, where a
manufacturer has cleared final products in terms of notification of the
Government of India in the Ministry of Finance (Department of Revenue)
No.20/2007 - Central Excise, dated the 25th April, 2007 and is unable to
utilize the CENVAT credit of duty taken on inputs required for manufacture of
final products specified in the said notification, other than final products
which are exempt or subject to nil rate of duty, for payment of duties of
excise on said final products, then the Central Government may allow the refund
of such credit subject to such procedure, conditions and limitations, as may be
specified by notification.
Explanation: For the purposes of this rule, "duty" means the duties
specified in sub-rule (1) of rule 3 of these rules.
Rule 6. Obligation of
manufacturer of dutiable and exempted goods and provider of taxable and
exempted services.- (1) The CENVAT credit shall not be allowed on
such quantity of input or input service which is used in the manufacture of
exempted goods or for provision of exempted services, except in the
circumstances mentioned in sub-rule (2).
Provided that the CENVAT credit on inputs shall not be denied to job
worker referred to in rule 12AA of the Central Excise Rules, 2002, on the
ground that the said inputs are used in the manufacture of goods cleared
without payment of duty under the provisions of that rule.
(2) Where a manufacturer or provider of
output service avails of CENVAT credit in respect of any inputs or input
services, and manufactures such final products or provides such output service
which are chargeable to duty or tax as well as exempted goods or services,
then, the manufacturer or provider of output service shall maintain separate
accounts for receipt, consumption and inventory of input and input service
meant for use in the manufacture of dutiable final products or in providing output
service and the quantity of input meant for use in the manufacture of exempted
goods or services and take CENVAT credit only on that quantity of input or
input service which is intended for use in the manufacture of dutiable goods or
in providing output service on which service tax is payable.
(3) Notwithstanding anything contained
in sub-rules (1) and (2), the manufacturer of goods or the provider of output
service, opting not to maintain separate accounts, shall follow either of the
following options, as applicable to him, namely:-
(i)
|
the manufacturer of goods shall pay an
amount equal to five per cent. of value of the
exempted goods and the provider of output service shall pay an amount equal to
six percent. of value of the exempted services; or
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(ii)
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the manufacturer of
goods or the provider of output service shall pay an amount equivalent to
the CENVAT credit attributable to inputs and input services used in, or
in relation to, the manufacture of exempted goods or for provision of
exempted services subject to the conditions and procedure specifiedin
sub-rule (3A).
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Explanation
I.-
If the manufacturer of goods or the provider of output service, avails any of
the option under this sub-rule, he shall exercise such option for all
exempted goods manufactured by him or, as the case may be, all exempted
services provided by him, and such option shall not be withdrawn during
the remaining part of the financial year.
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Explanation
II.-For
removal of doubt, it is hereby clarified that the credit shall not be allowed
on inputs and input services used exclusively for the manufacture of exempted
goods or provision of exempted service.
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(3A) For determination and payment of amount payable under clause (ii) of
sub-rule (3), the manufacturer of goods or the provider of output service shall
follow the following procedure and conditions, namely:-
(a)
(a)
|
while exercising this option, the
manufacturer of goods or the provider of output service shall intimate
in
writing to the Superintendent of Central Excise giving the following
particulars, namely:-
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|
(i)
|
name, address and registration No. of the
manufacturer of goods or provider of output service;
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(ii)
|
date from which the option under this
clause is exercised or proposed to be exercised;
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(iii)
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description of dutiable goods or taxable services;
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(iv)
|
description of exempted goods or exempted
services;
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(v)
|
CENVAT credit of inputs and input services
lying in balance as on the date of exercising the option
under this condition;
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(b)
|
the manufacturer of goods or the provider
of output service shall, determine and pay, provisionally, for
every month,-
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(i)
|
the amount equivalent to CENVAT credit
attributable to inputs used in or in relation to manufacture of
exempted goods, denoted as A;
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(ii)
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the amount of CENVAT credit attributable to
inputs used for provision of exempted services
(provisional)= (B/C) multiplied by D, where B denotes the total value of
exempted services provided
during the preceding financial year, C denotes the total value of dutiable
goods manufactured and
removed plus the total value of taxable services provided plus the total
value of exempted services
provided, during the preceding financial year and D denotes total CENVAT
credit taken on inputs during
the month minus A;
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(iii)
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the amount attributable to input services
used in or in relation to manufacture of exempted goods or
provision of exempted services (provisional) = (E/F) multiplied by G, where E
denotes total value of
exempted services provided plus the total value of exempted goods
manufactured and removed during
the preceding financial year, F denotes total value of taxable and exempted
services provided, and
total value of dutiable and exempted goods manufactured and removed, during
the preceding financial
year, and G denotes total CENVAT credit taken on input services during the
month;
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(c)
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the manufacturer of goods or the provider of
output service, shall determine finally the amount of CENVAT
credit attributable to exempted goods and exempted services for the whole
financial year in the following
manner, namely:-
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(i)
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the amount of CENVAT credit attributable to
inputs used in or in relation to manufacture of exempted
goods, on the basis of total quantity of inputs used in or in relation to
manufacture of said exempted
goods, denoted as H;
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(ii)
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the amount of CENVAT credit attributable to
inputs used for provision of exempted services = (J/K)
multiplied by L, where J denotes the total value of exempted services
provided during the financial year,
K denotes the total value of dutiable goods manufactured and removed plus the
total value of taxable
services provided plus the total value of exempted services provided, during
the financial year and L
denotes total CENVAT credit taken on inputs during the financial year minus
H;
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(iii)
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the
amount attributable to input services used in or in relation to manufacture
of exempted goods or
provision of exempted services = (M/N) multiplied by P, where M denotes total
value of exempted
services provided plus the total value of exempted goods manufactured and
removed during the
financial year, N denotes total value of taxable and exempted services
provided, and total value of
dutiable and exempted goods manufactured and removed, during the financial
year, and P denotes total
CENVAT credit taken on input services during the financial year;
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(d)
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the manufacturer of goods or the provider
of output service, shall pay an amount equal to the difference between the
aggregate amount determined as per condition (c) and the aggregate amount determined
and paid as per condition (b), on or before the 30th June of the succeeding
financial year, where the amount determined as per condition (c) is more
than the amount paid;
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(e)
|
the manufacturer of goods or the provider
of output service, shall, in addition to the amount short-paid, be
liable to pay interest at the rate of twenty-four per cent. per annum from
the due date, i.e., 30th June till the date of payment, where the amount
short-paid is not paid within the said due date;
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(f)
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where the amount determined as per
condition (c) is less than the amount determined and paid as
per condition (b), the said manufacturer of goods or the provider of
output service may adjust the excess amount on his own, by taking credit
of such amount;
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(g)
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the manufacturer of goods or the provider
of output service shall intimate to the jurisdictional
Superintendent of Central Excise, within a period of fifteen days from the
date of payment or adjustment,
as per condition (d) and (f) respectively, the following particulars,
namely:-
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(i)
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details of CENVAT credit attributable to
exempted goods and exempted services, month wise, for the
whole financial year, determined provisionally as per condition (b),
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(ii)
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CENVAT credit attributable to exempted
goods and exempted services for the whole financial year,
determined as per condition (c),
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(iii)
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amount short paid determined as per
condition (d), along with the date of payment of the amount short-paid,
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(iv)
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interest payable and paid, if any, on the
amount short-paid, determined as per condition (e), and
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(v)
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credit taken on account of excess payment,
if any, determined as per condition (f);
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(h)
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where the amount equivalent to CENVAT credit
attributable to exempted goods or exempted services cannot be determined
provisionally, as prescribed in condition (b), due to reasons that no
dutiable goods were manufactured and no taxable service was provided in
the preceding financial year, then the manufacturer of goods or the provider
of output service is not required to determine and pay such amount
provisionally for each month, but shall determine the CENVAT credit
attributable to exempted goods or exempted services for the whole year as
prescribed in condition (c) and pay the amount so calculated on or
before 30th June of the succeeding financial year.
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where the amount determined under condition
(h) is not paid within the said due date, i.e., the 30th June, the
manufacturer of goods or the provider of output service shall, in addition to
the said amount, be liable to pay interest at the rate of twenty four
per cent. per annum from the due date till the date of payment.
Explanation I.- "Value" for the
purpose of sub-rules (3) and (3A) shall have the same meaning assigned
to it under section 67 of the Finance Act, 1994 read with rules made thereunder or, as the case may be, the value determined
under section 4 or 4A of the Central Excise Act, 1944 read with rules made thereunder.
Explanation II.-The amount
mentioned in sub-rules (3) and (3A), unless specified otherwise, shall be
paid by the manufacturer of goods or the provider of output service by
debiting the CENVAT credit or otherwise on or before the 5th day of the
following month except for the month of March, when such payment shall be
made on or before the 31st day of the month of March.
Explanation III.- If the
manufacturer of goods or the provider of output service fails to pay the
amount payable under sub-rule (3) or as the case may be sub-rule (3A), it
shall be recovered, in the manner as provided in rule 14, for recovery of
CENVAT credit wrongly taken.
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(4) No CENVAT credit shall be allowed on capital goods which are used exclusively
in the manufacture of exempted goods or in providing exempted services, other
than the 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.
(5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of
the whole of service tax paid on taxable service as specified in sub-clause
(g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy),
(zzd), (zzg), (zzh), (zzi), (zzk),
(zzq) and (zzr) of clause
(105) of section 65 of the Finance Act shall be allowed unless such service is
used exclusively in or in relation to the manufacture of exempted goods or
providing exempted services.
(6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable
in case the excisable goods removed without payment of duty are either-
(i)
|
cleared to a unit in a special economic zone;
or to a developer of a special economic zone for their authorized operations
; or
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(ii)
|
cleared to a hundred per cent.
export-oriented undertaking; or
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(iii)
|
cleared to a unit in an Electronic Hardware
Technology Park or Software Technology Park; or
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(iv)
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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 Excise, dated the 28th August, 1995, number G. S R. 602
(E), dated the 28th August, 1995; or
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(v)
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cleared for export under bond in terms of
the provisions of the Central Excise Rules, 2002; or
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(vi)
|
gold or silver falling within Chapter 71 of
the said First Schedule, arising in the course of manufacture of copper or
zinc by smelting; or.
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(vii)
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all goods which are exempt from the duties of
customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51
of 1975) and the additional duty leviable under sub-section (1) of section 3
of the said Customs Tariff Act when imported into India and are
supplied,-
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(a)
against International Competitive Bidding; or
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(b)
to a power project from which power supply has been tied up through
tariff based competitive bidding; or
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(c)
to a power project awarded to a developer through tariff based
competitive bidding,
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in terms of notification No. 6/2006-Central
Excise, dated the 1st March, 2006.
Rule 7. Manner of distribution of credit by input service
distributor. - The input service distributor may distribute the
CENVAT credit in respect of the service tax paid on the input service to its
manufacturing units or units providing output service, subject to the following
condition, namely:-
(a) the credit distributed against a document referred to in rule 9 does not
exceed the amount of service tax paid thereon; or
(b) credit of service tax attributable to service use in a unit exclusively
engaged in manufacture of exempted goods or providing of exempted services
shall not be distributed.
Rule 7A. Distribution of credit on inputs by the office or any
other premises of output service provider.- (1) A provider of output
service shall be allowed to take credit on inputs and capital goods received,
on the basis of an invoice or a bill or a challan issued by an office or
premises of the said provider of output service, which receives invoices,
issued in terms of the provisions of the Central Excise Rules, 2002, towards
the purchase of inputs and capital goods.
(2) The provisions of these rules or any other rules made under the Central
Excise Act, 1944, as made applicable to a first stage dealer or a second stage
dealer, shall mutatis mutandis apply to such office or premises of the provider
of output service.
Rule 8. Storage of input outside the factory of the manufacturer.-
The Deputy Commissioner of Central Excise or the Assistant
Commissioner of Central Excise, as the case may be, having jurisdiction over
the factory of a manufacturer of the final products may, in exceptional
circumstances having regard to the nature of the goods and shortage of storage
space at the premises of such manufacturer, by an order, permit such
manufacturer to store the input in respect of which CENVAT credit has been
taken, outside such factory, subject to such limitations and conditions as he
may specify:
Provided that where such input is not used in the manner specified in these
rules for any reason whatsoever, the manufacturer of the final products shall
pay an amount equal to the credit availed in respect of such input.
Rule 9. Documents and accounts.- (1) The CENVAT credit
shall be taken by the manufacturer or the provider of output service or input
service distributor, as the case may be, on the basis of any of the following
documents, namely :-
(a)
|
an invoice issued by-
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(i)
|
a manufacturer for clearance of -
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(I)
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inputs or capital goods from his factory or
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;
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|
(II)
|
inputs or capital goods as such;
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(ii)
|
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an importer;
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(iii)
|
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an importer from his depot or from the
premises of the consignment agent of the said importer if the
said depot or the premises, as the case may be, is registered in terms of the
provisions of Central
Excise Rules, 2002;
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(iv)
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a first stage dealer or a second stage
dealer, as the case may be, in terms of the provisions of Central Excise
Rules, 2002; or
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(b)
|
a supplementary invoice, issued by a
manufacturer or importer of inputs or capital goods in terms of the
provisions of Central Excise Rules, 2002 from his factory or depot or from
the premises of the consignment agent of the said manufacturer or importer or
from any other premises from where the goods are sold by, or on behalf of,
the said manufacturer or importer, in case additional amount of excise duties
or additional duty leviable under section 3 of the Customs Tariff Act, 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 misstatement or suppression of facts or
contravention of any provisions of the Excise Act, or of the Customs Act,
1962 (52 of 1962) or the rules made there under with intent to evade payment
of duty.
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Explanation.- For removal of doubts,
it is clarified that supplementary invoice shall also include challan or any
other similar document evidencing payment of additional amount of additional
duty leviable under section 3 of the Customs Tariff Act; or
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(c)
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a bill of entry; or
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(d)
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a certificate issued by an appraiser of
customs in respect of goods imported through a Foreign Post Office; or
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(e)
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a challan evidencing payment of service tax
by the person liable to pay service tax under sub-clauses (iii), (iv), (v) and
(vii) of clause (d) of sub-rule (1) of rule (2) of the Service Tax Rules,
1994; or
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(f)
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an invoice, a bill or challan issued by a
provider of input service on or after the 10th day of, September, 2004; or
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(g)
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an invoice, bill or challan issued by an
input service distributor under rule 4A of the Service Tax Rules, 1994.
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Provided that the credit of
additional duty of customs levied under sub-section (5) of section 3 of the
Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if the invoice or
the supplementary invoice, as the case may be, bears an indication to the
effect that no credit of the said additional duty shall be admissible;
(2) No CENVAT credit under sub-rule(1)
shall be taken unless all the particulars as prescribed under the Central
Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are
contained in the said document:
Provided that if the said document does not contain all the
particulars but contains the details of duty or service tax payable,
description of the goods or taxable service, assessable value, Central Excise
or Service tax Registration number of the person issuing the invoice, as the
case may be, name and address of the factory or warehouse or premises of first
or second stage dealers or provider of taxable service, and the Deputy
Commissioner of Central Excise or the Assistant Commissioner of Central Excise,
as the case may be, is satisfied that the goods or services covered by the said
document have been received and accounted for in the books of the account of
the receiver, he may allow the CENVAT credit;
(3) Omitted
(4) The CENVAT credit in respect of input or capital goods purchased from a
first stage dealer or second stage dealer shall be allowed only if such first
stage dealer or second stage dealer, as the case may be, has maintained records
indicating the fact that the input or capital goods was supplied from the stock
on which duty was paid by the producer of such input or capital goods and only
an amount of such duty on pro rata basis has been indicated in the invoice
issued by him.
(5) The manufacturer of final products or the provider of output service shall
maintain proper records for the receipt, disposal, consumption and inventory of
the input and capital goods in which the relevant information regarding the
value, duty paid, CENVAT credit taken and utilized, the person from whom the
input or capital goods have been procured is recorded and the burden of proof regarding
the admissibility of the CENVAT credit shall lie upon the manufacturer or
provider of output service taking such credit.
(6) The manufacturer of final products or the provider of output service shall
maintain proper records for the receipt and consumption of the input services
in which the relevant information regarding the value, tax paid, CENVAT credit
taken and utilized, the person from whom the input service has been procured is
recorded and the burden of proof regarding the admissibility of the CENVAT
credit shall lie upon the manufacturer or provider of output service taking
such credit.
(7) 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 form specified, by notification, by
the Board:
Provided that where a manufacturer is availing exemption under a
notification based on the value or quantity of clearances in a financial year,
he shall file a quarterly return in the form specified, by notification, by the
Board within twenty days after the close of the quarter to which the return
relates.
(8) A first stage dealer or a second stage dealer, as the case may be, shall
submit within fifteen days from the close of each quarter of a year to the
Superintendent of Central Excise, a return in the form specified, by
notification, by the Board.
(9) The provider of output service
availing CENVAT credit, shall submit a half yearly return in form specified, by
notification, by the Board to the Superintendent of Central Excise, by the end
of the month following the particular quarter or half year.
(10) The input service distributor,
shall furnish a half yearly return in such form as may be specified, by
notification, by the Board, giving the details of credit received and
distributed during the said half year to the jurisdictional Superintendent of
Central Excise, not later than the last day of the month following the half
year period.
(11) The provider of output service,
availing CENVAT credit referred to in sub-rule (9) or the input service
distributor referred to in sub-rule (10), as the case may be, may submit a
revised return to correct a mistake or omission within a period of sixty days
from the date of submission of the return under sub-rule (9) or sub-rule (10),
as the case may be.
Rule 9A. Information relating to principal inputs.-
(1) A manufacturer of final products shall furnish to the Superintendent of
Central Excise, annually by 30th April of each Financial Year, a declaration in
the Form specified, by a notification, by the Board, in respect of each of the
excisable goods manufactured or to be manufactured by him, the principal inputs
and the quantity of such principal inputs required for use in the manufacture
of unit quantity of such final products:
Provided that for the year 2004-05, such information shall be
furnished latest by 31st December, 2004.
(2) If a manufacturer of final products intends to make any alteration in the
information so furnished under sub-rule (1), he shall furnish information to
the Superintendent of Central Excise together with the reasons for such
alteration before the proposed change or within 15 days of such change in the
Form specified by the Board under sub-rule (1).
(3) A 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 Form specified, by a notification, by the Board, in respect of
information regarding the receipt and consumption of each principal inputs with
reference to the quantity of final products manufactured by him.
(4) The Central Government may, by notification and subject to such conditions
or limitations, as may be specified in such notification, specify manufacturers
or class of manufacturers who may not be required to furnish declaration
mentioned in sub-rule (1) or monthly return mentioned in sub-rule (3).
Explanation: For the purposes of this rule, "principal inputs",
means any input which is used in the manufacture of final products where the
cost of such input constitutes not less than 10% of the total cost of
raw-materials for the manufacture of unit quantity of a given final products.
Rule 10. Transfer of CENVAT 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) If a provider of output service shifts or transfers his business on account
of change in ownership or on account of sale, merger, amalgamation, lease or
transfer of the business to a joint venture with the specific provision for
transfer of liabilities of such business, then, the provider of output service
shall be allowed to transfer the CENVAT credit lying unutilized in his accounts
to such transferred, sold, merged, leased or amalgamated business.
(3) The transfer of the CENVAT credit under sub-rules (1) and (2) shall be
allowed only if the stock of inputs as such or in process, or the capital goods
is also transferred along with the factory or business premises 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 Deputy Commissioner of
Central Excise or, as the case may be, the Assistant Commissioner of Central
Excise.
Rule 11. Transitional provision.- (1) Any amount of
credit earned by a manufacturer under the CENVAT Credit Rules, 2002, as they
existed prior to the 10th day of September, 2004 or by a provider of output
service under the Service Tax Credit Rules, 2002, as they existed prior to the
10th day of September, 2004, and remaining unutilized on that day shall be
allowed as CENVAT credit to such manufacturer or provider of output service
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 taking CENVAT
credit on inputs or input services before such option is exercised, shall be
required to pay an amount equivalent to the CENVAT credit, if any, allowed to
him in respect of inputs lying in stock or in process or contained in final
products 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 manufacturer or producer of a final product shall be required to pay an
amount equivalent to the CENVAT credit, if any, taken by him in respect of
inputs received for use in the manufacture of the said final product and is
lying in stock or in process or is contained in the final product lying in
stock, if,-
(i)
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he opts for exemption from whole of the
duty of excise leviable on the said final product manufactured or produced by
him under a notification issued under section 5A of the Act; or
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(ii)
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the said final product has been exempted
absolutely under section 5A of the Act, and after deducting the said amount
from the balance of CENVAT credit, 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 other final product whether cleared
for home consumption or for export, or for payment of service tax on
any output service, whether provided in India or exported.
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(4) A provider of output service shall be required to pay an amount equivalent
to the CENVAT credit, if any, taken by him in respect of inputs received for
providing the said service and is lying in stock or is contained in the taxable
service pending to be provided, when he opts for exemption from payment of
whole of the service tax leviable on such taxable service under a notification
issued under section 93 of the Finance Act, 1994 (32 of 1994) and after
deducting the said amount from the balance of CENVAT credit, 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 or for payment of service tax on any
other output service, whether provided in India or exported.
Rule 12. Special dispensation in respect of inputs manufactured in
factories located in specified areas of North East region, Kutch district of
Gujarat, State of Jammu and Kashmir and State of Sikkim. -
Notwithstanding anything contained in these rules, where a manufacturer has
cleared any inputs or capital goods, in terms of notifications of the
Government of India in the Ministry of Finance (Department of Revenue) No.
32/99- Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th
July, 1999] or No. 33/99- Central Excise, dated the 8th July, 1999 [G.S.R.
509(E), dated the 8th July, 1999] or No. 39/2001-Central Excise, dated the 31st
July, 2001 [G.S.R. 565(E), dated the 31st July, 2001] or notification of the
Government of India in the erstwhile Ministry of Finance and Company Affairs (Department
of Revenue) No.56/2002-Central Excise, dated the 14th November, 2002 [G.S.R.
764(E), dated 14th November, 2002]or No.57/2002-Central Excise, dated the 14th
November, 2002 [ GSR 765(E), dated the 14th November, 2002] or notification of
the Government of India in the Ministry of Finance (Department of Revenue) No.
56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the
25th June, 2003] or 71/2003-Central Excise, dated the 9th September, 2003
[G.S.R.717 (E), dated the 9th September, 2003, or No.20/2007-Central Excise,
dated the 25th April, 2007 [ GSR 307 (E), dated the 25th April, 2007] the
CENVAT credit 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.
Rule 12A. Procedure and facilities for large taxpayer.-
Notwithstanding anything contained in these rules, the following procedure
shall apply to a large taxpayer,-
(1) A large taxpayer may remove inputs, except motor spirit, commonly known as
petrol, high speed diesel and light diesel oil or capital goods, as such, on
which CENVAT credit has been taken, without payment of an amount specified in
sub-rule (5) of rule 3 of these rules, under the cover of a transfer challan or
invoice, from any of his registered premises (hereinafter referred to as the
sender premises) to his other registered premises, other than a premises of a
first or second stage dealer (hereinafter referred to as the recipient
premises), for further use in the manufacture or production of final products
in recipient premises subject to condition that
(a)
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the final products are manufactured or
produced using the said inputs and cleared on payment of appropriate
duties of excise leviable thereon within a period of six months, from the
date of receipt of the inputs in the recipient premises; or
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(b)
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the final products are manufactured or
produced using the said inputs and exported out of India, under bond or
letter of undertaking within a period of six months, from the date of receipt
of the input goods in the recipient premises, and that any other
conditions prescribed by the Commissioner of Central Excise, Large Taxpayer
Unit in this regard are satisfied:
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Explanation 1- The transfer
challan or invoice shall be serially numbered and shall contain the
registration number, name, address of the large taxpayer, description,
classification, time and date of removal, mode of transport and vehicle
registration number, quantity of the goods and registration number and name of
the consignee:
Provided that if the final products manufactured or produced using
the said inputs are not cleared on payment of appropriate duties of excise
leviable thereon or are not exported out of India within the said period of six months from the date of receipt of the
input goods in the recipient premises, or such inputs are cleared as such from
the recipient premises, an amount equal to the credit taken in respect of such
inputs by the sender premises shall be paid by the recipient premises with
interest in the manner and rate specified under rule 14 of these rules:
Provided further that if such capital goods are used exclusively in
the manufacture of exempted goods, or such capital goods are cleared as such
from the recipient premises, an amount equal to the credit taken in respect of
such capital goods by the sender premises shall be paid by the recipient
premises with interest in the manner and rate specified under rule 14 of these
rules:
Explanation 2 -- If a large taxpayer fails to pay any amount due in
terms of the first and second proviso, it shall be recovered along with
interest in the manner as provided under rule 14 of these rules:
Provided also that nothing contained in this sub-rule shall be
applicable if the recipient premises is availing following notifications of
Government of India in the Ministry of Finance (Department of Revenue), -
(i)
|
No. 32/99-Central Excise, dated the 8th
July, 1999 [G.S.R. 508(E), dated 8th July, 1999];
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(ii)
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No. 33/99-Central Excise, dated the 8th
July, 1999 [G.S.R. 509(E), dated 8th July, 1999];
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(iii)
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No. 39/2001-Central Excise, dated the 31st
July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001];
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(iv)
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No. 56/2002-Central Excise, dated the 14th
November, 2002 [G.S.R. 764(E), dated the
14th November, 2002];
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(v)
|
No. 57/2002-Central Excise, dated 14th
November, 2002 [G.S.R. 765(E), dated the 14th November,
2002];
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(vi)
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No. 56/2003-Central Excise, dated the 25th
June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003];
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(vii)
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No. 71/2003-Central Excise, dated the 9th
September, 2003 [G.S.R. 717 (E), dated the 9th September, 2003];
and
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(viii)
|
No.20/2007-Central Excise, dated the 25th
April, 2007 [ GSR 307 (E), dated the 25th April, 2007];
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Provided also that nothing
contained in this sub-rule shall be applicable to a export oriented unit or a
unit located in a Electronic Hardware Technology Park or Software Technology
Park.
(2) The first recipient premises may take CENVAT credit of the amount paid
under first proviso to sub-rule(1) as if it was a duty paid by the sender
premises who removed such goods on the basis of a document showing payment of
such duties.
(3) CENVAT credit of the specified duties taken by a sender premises shall not
be denied or varied in respect of any inputs or capital goods,-
(a)
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removed as such under sub-rule (1) on the ground
that the said inputs or the capital goods have been
removed without payment of an amount specified in sub-rule (5) of rule 3 of
these rules; or
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(b)
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on the ground that the said inputs or
capital goods have been used in the manufacture of any
intermediate goods removed without payment of duty under sub-rule (1) of rule
12BB of Central Excise
Rules, 2002.
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Explanation: For the purpose of
this sub-rule, " intermediate goods " shall have the same meaning assigned to
it in sub-rule (1) of rule 12BB of the Central Excise Rules, 2002.
(4) A
large taxpayer may transfer, CENVAT credit available with one of his registered
manufacturing premises or premises providing taxable service to his other such
registered premises by,-
(i)
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making an entry for such transfer in the
record maintained under rule 9;
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(ii)
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issuing a transfer challan containing
registration number, name and address of the registered premises transferring
the credit as well as receiving such credit, the amount of credit transferred
and the particulars of such entry as mentioned in clause (i),
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and such recipient premises can take CENVAT
credit on the basis of such transfer challan as mentioned in clause (ii):
Provided that such transfer or utilisation
of CENVAT credit shall be subject to the limitations prescribed under clause
(b) of sub-rule (7) of rule 3.
Provided further that nothing contained in this sub-rule shall be
applicable if the registered manufacturing premises is availing following notifications
of Government of India in the Ministry of Finance (Department of Revenue),
-
(i)
|
No. 32/99-Central Excise, dated the 8th
July, 1999 [G.S.R. 508(E), dated 8th July, 1999];
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(ii)
|
No. 33/99-Central Excise, dated the 8th July,
1999 [G.S.R. 509(E), dated 8th July, 1999];
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(iii)
|
No. 39/2001-Central Excise, dated the 31st
July, 2001 [G.S.R. 565 (E), dated the 31st July, 2001];
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(iv)
|
No. 56/2002-Central Excise, dated the 14th
November, 2002 [G.S.R. 764(E), dated the 14th November, 2002];
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(v)
|
No. 57/2002-Central Excise, dated 14th
November, 2002 [G.S.R.. 765(E), dated the 14th November, 2002];
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(vi)
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No. 56/2003-Central Excise, dated the 25th
June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003];
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(vii)
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No. 71/2003-Central Excise, dated the 9th
September, 2003 [G.S.R. 717 (E), dated the 9th September, 2003]; and
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(viii)
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No.20/2007-Central Excise, dated the 25th
April, 2007 [ GSR 307 (E), dated the 25th April, 2007];
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(5) A large
taxpayer shall submit a monthly return, as prescribed under these rules, for
each of the registered premises.
(6) Any notice issued but not adjudged by any
of the Central Excise officer administering the Act or rules made thereunder immediately before the date of grant of
acceptance by the Chief Commissioner of Central Excise, Large Taxpayer Unit,
shall be deemed to have been issued by Central Excise officers of the said
Unit.
(7) Provisions of these rules, in so far as
they are not inconsistent with the provisions of this rule shall mutatis
mutandis apply in case of a large taxpayer.
Rule 12AA. Power to impose restrictions in certain types of cases.-
Notwithstanding anything contained in these rules, where the Central Government,
having regard to the extent of misuse of CENVAT credit, nature and type of such
misuse and such other factors as may be relevant, is of the opinion that in
order to prevent the misuse of the provisions of CENVAT credit as specified in
these rules, it is necessary in the public interest to provide for certain
measures including restrictions on a manufacturer, first stage and second stage
dealer or an exporter, may by a notification in the Official Gazette, specify
nature of restrictions including restrictions on utilization of CENVAT credit
and suspension of registration in case of a dealer and type of facilities to be
withdrawn and procedure for issue of such order by an officer authorized by the
Board.
Rule 13. Power of Central Government to notify goods for deemed
CENVAT credit.- Notwithstanding anything contained in rule 3, the
Central Government may, by notification, declare the input or input service on
which the duties of excise, or additional duty of customs or service tax paid,
shall be deemed to have been paid at such rate or equivalent to such amount as
may be specified in that notification and allow CENVAT credit of such duty or
tax deemed to have been paid in such manner and subject to such conditions as
may be specified in that notification even if, in the case of input, the
declared input, or in the case of input service, the declared input service, as
the case may be, is not used directly by the manufacturer of final products, or
as the case may be, by the provider of taxable service, declared in that
notification, but contained in the said final products, or as the case may be,
used in providing the taxable service.
Rule 14. Recovery of CENVAT credit wrongly taken or erroneously
refunded.- Where the CENVAT credit has been taken or utilized
wrongly or has been erroneously refunded, the same along with interest shall be
recovered from the manufacturer or the provider of the output service and the
provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of
the Finance Act, shall apply mutatis mutandis for effecting such recoveries.
Rule 15. Confiscation and penalty.- (1) If any person,
takes or utilises CENVAT credit in respect of input
or capital goods or input services, wrongly or in contravention of any of the
provisions of these rules, then, all such goods shall be liable to confiscation
and such person, shall be liable to a penalty not exceeding the duty or service
tax on such goods or services, as the case may be, or two thousand rupees,
whichever is greater.
(2) In a case, where the CENVAT credit in respect of input or capital goods or
input services has been taken or utilised wrongly by
reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of
any of the provisions of the Excise Act, or of the rules made thereunder with intent to evade payment of duty, then, the
manufacturer shall also be liable to pay penalty in terms of the provisions of
section 11AC of the Excise Act.
(3) In a case, where the CENVAT credit in respect of input or capital goods or
input services has been taken or utilised wrongly by
reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of
any of the provisions of these rules or of the Finance Act or of the rules made
thereunder with intent to evade payment of service
tax, then, the provider of output service shall also be liable to pay penalty
in terms of the provisions of Section 78 of the Finance Act.
(4) Any order under sub-rule (1), sub-rule (2) or sub-rule (3) shall be issued
by the Central Excise Officer following the principles of natural justice.
Rule 15A. General penalty.- Whoever contravenes the
provisions of these rules for which no penalty has been provided in the rules,
he shall be liable to a penalty which may extend to five thousand rupees.
Rule 16. Supplementary provision. - (1) Any
notification, circular, instruction, standing order, trade notice or other
order issued under the CENVAT Credit Rules, 2002 or the Service Tax Credit
Rules, 2002, by the Central Government, the Central Board of Excise and
Customs, the Chief Commissioner of Central Excise or the Commissioner of
Central Excise, and in force at the commencement of these rules, shall, to the
extent it is relevant and consistent with these rules, be deemed to be valid
and issued under the corresponding provisions of these rules.
(2) References in any rule, notification, circular, instruction, standing
order, trade notice or other order to the CENVAT Credit Rules, 2002 and any provision
thereof or, as the case may be, the Service Tax Credit Rules, 2002 and any
provision thereof shall, on the commencement of these rules, be construed as
references to the CENVAT Credit Rules, 2004 and any corresponding provision
thereof.
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