Specific Provisions for Specified Districts / States - Cenvat Credit - Ready Reckoner [OLD] - Cenvat Credit

Chapter 18 Special Provisions for specified districts / states Statutory Provisions: Rule 12 of the Cenvat Credit Rules, 2004 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 but subject to the proviso to clause (i) of sub rule (1) of the rule 3, 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 25 th April, 2007 [ GSR 307 (E), dated the 25 th April, 2007 , or No.1/2010-Central Excise, dated the 6th February, 2010 [G.S.R. 62(E), dated the 6th February, 2010 , 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. ================================ Legal Position Rule 12 is a special purpose provision and addresses the exemption notifications which grant exemption in the different manner against the manner generally adopted for availing exemption. Under the notifications specified in the rule 12 , the exemption is granted in such a way that the duty payable shall be exempt in excess of Cenvat Credit available to the manufacture. The purpose of these notifications is that the benefit of Cenvat Credit is not lost even after availing exemption by the units specified in the respective exemption notification and the buyer is entitled to avail the Cenvat Credit. Therefore, the units availing exemption under specified notifications shall not be required to follow the procedures / conditions of Rule 6 and shall be allowed full Cenvat Credit instead. Thus rule 12 encourages persons in other parts of India to buy inputs and capital goods from such regions, as inputs and capital goods procured from such regions would be deemed to be duty paid. Rule 12 overrides the other Cenvat credit rules but is subject to the proviso to clause (i) of sub rule (1) of rule 3 . In other words, if the goods are liable to 1% duty or are the goods specified in serial number 67 and 128 which have been exempted under notification no. 12/2012-C.E. dated 17.03.2012 , the provisions of rule 12 will not apply. Who can avail the Exemption The Assessee whose factories are situated in the following areas:- Assam Manipur Mizoram Tirpura Arunachaal Pradesh State of Sikkim Megalaya Kutch district of Gujarat State of Jammu and Kashmir