FOREWORD - Central Excise Practice Manual (OLD) - Central Excise

Central Excise Guide for the new registrants PAYMENT OF TAX IS NOT A LIABILITY; IT IS A RESPONSIBILITY! If those who think to achieve have a firm and focussed mind, they will realize what they thought of and even as they have thought of. -Kural 666 The Coimbatore Central Excise Commissionerate is grateful to the Chief Commissioner of Central Excise, Coimbatore Zone for his valuable guidance and effective support in bringing out this guide and in the implementation of the various Taxpayer friendly initiatives of the Commissionerate. Ministry of Finance Department of Revenue Office of the Chief Commissioner of Central Excise, Coimbatore Zone, Coimbatore - 641018 MESSAGE It gives me immense pleasure to note that the Coimbatore Commissionerate has brought out a booklet containing the vital provisions of the Central Excise law and Procedures for the benefit of new Central Excise registrants on the occasion of the "Central Excise Day -2009". The Commissionerate, ever since its inception in 1983, has always been in the forefront of innovation to serve the Trade and Industry in the best possible manner. I proudly recollect at this juncture that this Commissionerate had brought out the very useful publication of the booklet on Service Tax which subsequently paved the way for Director General of Service Tax to update and bringing a booklet for wider circulation throughout the country. I am sure that this Guide would serve as the ready reckoner for the assessees to comply with the statutory requirements in a hassle free manner. I take this opportunity to congratulate all the Officers and staff of the Coimbatore Commissionerate for successfully carrying out the mission of educating the Tax Payers, which would ultimately result in easier and better tax compliance. Coimbatore, 24-2-2009. T. PREMKUMAR, IRS CHIEF COMMISSIONER Guide for New Registrants of Central Excise First Edition : February, 2009 Supplied Free of cost DISCLAIMER This Guide is published for the purpose of easy understanding of the Central Excise Law and Procedures. For legal purposes, the relevant statutes and the notifications issued thereunder by the Central Government may be referred to. The contents of this Guide are as per the statutory provisions which are in force as on the date of publication of the Guide.The same are liable to change as per the policy decisions of the Government. Certain information and details incorporated in this Guide are only illustrative in nature and cannot be considered to be exhaustive. Please forward your views and suggestions to: The Commissioner of Central Excise, 6/7 A.T.Devaraj Street, Race Course Road, Coimbatore 641 018. email: [email protected] C. RAJENDIRAN, IRS COMMISSIONER Central Excise, Customs and Service Tax Race Course Road, Coimbatore - 641 018 Ph: (0422) 2223130 Fax: 2220775 email: [email protected] FOREWORD Central Board of Excise and Customs, the governing body for indirect taxation with its three strong arms viz. Customs, Central Excise and Service Tax is the single largest revenue earner for the National exchequer. The total indirect tax revenue during the last fiscal was Rs. 274662 Crores, which accounts for about 51% of the total tax revenue of which the contribution from Central Excise was Rs. 122939 Crores. The Central Excises and Salt Act, 1944 (presently known as the Central Excise Act, 1944 ) was enacted on 24 th February, 1944 by amalgamating 16 legislations governing taxation on various commodities. During the past 65 years, the Department had travelled a long way in the service of the nation and industry as well. From the stage of a controller, the Department had transformed as a facilitator in tune with the policy of liberalization. The launch of Help Centres as per the announcement made by Shri P.Chidambaram, the then Hon'ble Union Finance Minister in the 2005 - 06 Budget is one of the major steps in this direction underscoring the fact that voluntary compliance through education and enlightenment is the hall mark of the new era. In spite of simplification of Central Excise Laws over a period of time, the new assessees who join the family of Central Excise Tax payers may initially find it difficult to understand the statutory provisions as the subject matter is not familiar to them. There is a constant need for demystifying the systems and procedure with a view to create a knowledgeable, responsible and voluntary compliant Tax Payers' Regime. The Officers of the Department are conscious of the fact that the Department and Industry need to stand shoulder-to-shoulder in taking the Nation to greater heights. Against this backdrop, the publication of "Guide for new Registrants of Central Excise" gains significance as this booklet would serve as the torch bearer for the new Central Excise assessees. I am confident that this booklet would be of immense help to the assessees to have a fair knowledge about their obligations and responsibilities and enable them to discharge their functions as responsible tax payers. I take this opportunity to express my sincere thanks and appreciation to the Officers of this Commissionerate who have put in their best efforts in publication of this Guide in a short period of time on the occasion of "The Silver Jubilee Year Central Excise Day Celebrations 2009". I also sincerely thank the Coimbatore District Small Industries Association (CODISSIA) for their support in bringing out this publication. Coimbatore, 24-2-2009. K. ILANGO PRESIDENT Coimbatore District Small Industries Association CODISSIAG.D.NaiduTowers, Huzur Road, Coimbatore - 641 018 MESSAGE Though Central Excise laws have been simplified and rationalized to a great extent, manufacturers need to be updated on the changes on regular basis. Coimbatore District Small Industries Association (CODISSIA) is glad that the Central Excise Commissionerate, Coimbatore is bringing out a book to educate the new assessees on the various aspects of Central Excise. I am sure that this will help the trade and industry in not only complying with the law but also making use of the various beneficial provisions in it. We thank the officers and staff of the Commissionerate and Shri C.Rajendiran, IRS, Commissioner of Central Excise, Coimbatore for his various initiatives in educating the assessees of which this book is one. CODISSIA is glad to be associated in bringing out this book. Coimbatore, 24-2-2009. Important aspects covered in this Guide: An Overview of Central Excise Law And Procedures An Overview of Cenvat Credit Rules, 2004 DOs and DON'Ts on availment of Cenvat Credit Dates to remember Provisions relating to Penalty and Interest - At a glance Frequently Asked Questions (FAQ) on Central Excise Glossary of terms used in this Guide: ACT Central Excise Act, 1944 AC/DC Assistant /Deputy Commissioner CBEC/Board Central Board of Excise Customs CESTAT/Tribunal Customs, Excise and Service Tax Appellate Tribunal CETA The Central Excise Tariff Act, 1985 CCR Cenvat Credit Rules, 2004 Credit Cenvat credit EOU Export Oriented Unit GTA Goods Transport Agency LUT Letter of undertaking Rules / CER Central Excise Rules, 2002 Rule Rule of the Central Excise Rules, 2002 Section Section of the Central Excise Act, 1944 Tariff Central Excise Tariff Valuation Rules Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 Important statutes governing the taxation on Central Excise: (i) Central Excise Act, 1944 (ii) Central Excise Tariff Act, 1985 (iii) Central Excise Rules, 2002 (iv) Central Excise (Appeals) Rules, 2001 (v) Cenvat Credit Rules, 2004 (vi) Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (vii ) Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 (viii) Authority for Advance Rulings (Customs, Central Excise and Service Tax) Procedure Regulations, 2005 (ix) Central Excise (Advance Rulings) Rules, 2002 (x) Central Excise (Compounding of Offences) Rules, 2005 (xi) Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 (xii) Customs and Central Excise Duties and Service Tax Drawback Rules,1995 (xiii) Central Excise (Removal of Difficulties) Rules, 2005 (xiv) Central Excise (Settlement of Cases) Rules, 2007 (xv) Consumer Welfare Fund Rules, 1992 (xvi) Customs, Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 (xvii) Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008