Central Excise Rules - Amendments to 3rd Amendment Rules of Excise - 26/96 - Central Excise - Non Tariff

Central Excise Rules - Amendments to 3rd Amendment Rules of Excise

Notification No. 26/96-C.E. (N.T.)

Dated 31-8-1996

In exercise of the powers conferred by section 37 of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise (Third Amendment) Rules, 1996 (hereinafter referred to as the said amendment rules), namely :-

1. (i) These rules may be called the Central Excise [(Third Amendment) Amendment] Rules, 1996.

 (ii) They shall come into force on the date of their publication in the Official Gazette.

2. In the said amendment rules, -

(i) for Rule 4, the following rule shall be substituted, namely :-

4. In the said rules, after Rule 57C, the following rule shall be inserted, namely :-

"57CC. Adjustment of credit if final products are exempt. - (1) Where a manufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as any other final product which is exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty [other than those cleared either to a unit in a Free Trade Zone or to a hundred per cent Export-Oriented Unit or to a unit in an Electronic Hardware Technology Park or to a unit in Software Techno- logy Parks or supplied to the United Nations or an international organisation for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 108/95-Central Excises, dated the 28th August, 1995] and the manufacturer takes the credit of specified duty on any input (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (2) of this rule are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearance from the factory by adjustment in the credit account maintained under sub-rule (3) of Rule 57G or in the accounts maintained under Rule 9 or sub-rule (1) of Rule 173G or if such adjustment is not possible for any reason, by cash recovery from the manufacturer availing of the credit under Rule 57A.

Provided that nothing contained in this sub-rule shall apply to final products falling under Chapters 50 to 63 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

Provided further that the provisions of this sub-rule shall not apply to final products which are exported under bond in terms of the provisions of Rule 13.

 Provided also that the provisions of this sub-rule shall not apply to -

(a) articles of plastics, falling within Chapter 39;

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

(c) Black and White television sets, falling within Chapter 85 which are exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty.

Explanation I. - For removal of doubts, it is hereby declared that the provisions of this sub-rule shall apply notwithstanding the fact that the inputs on which credit has been taken are not actually used or contained in any particular clearance of final products referred to in this sub-rule.

Explanation II. - If any goods are not sold by the manufacturer at the factory gate but are sold from a depot or from the premises of a consignment agent or from any other premises, the price (excluding sales tax and other taxes, if any, payable) at which such goods are ordinarily sold by the manufacturer from such depot or from the premises of a consignment agent or from any other premises shall be deemed to be the price for the purpose of this sub-rule.

(2) In respect of the inputs (other than inputs used as fuel) which are used in or in relation to the manufacture of any goods, which are exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty, the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs for the aforesaid purpose and does not take credit of the specified duty on such inputs."

(ii) in Rule 6, for clause (ii), the following shall be substituted, namely, -

`(ii) after sub-rule (3), the following sub-rule shall be inserted namely :-

"(3A) (i) Where a manufacturer intends to remove the inputs as such, or after the inputs have been partially processed during the course of manufacture of final products to a place outside the factory for the purposes specified in sub-rule (3), the manufacturer shall do so after debiting an amount equal to ten per cent of the value of such inputs, or as the case may be, the partially processed inputs, declared by the manufacturer on the challan, under which such inputs or, as the case may be, partially processed inputs are cleared from the factory, in the account maintained under sub-rule (3) of rule 57G or in the accounts maintained under rule 9 or sub rule (1) of rule 173G.

(ii) Notwithstanding anything contained in rule 57A, the manufacturer shall be eligible to take credit of an equivalent amount after the inputs or partially processed inputs, as the case may be, have been received back in full in the factory of the manufacturer in the account maintained under sub-rule (3) of rule 57G and the credit so taken may be utilised for the purposes specified in sub-rule (4).

(iii) A manufacturer shall take credit under this sub-rule only when the entire quantity of inputs or the processed goods, as the case may be, but excluding the waste, if any, arising in the course of operation outside the factory of the manufacturer, or otherwise, is received back in his factory.

(iv) A manufacturer shall not take credit under this sub-rule unless the inputs or the processed goods, as the case may be, are received back in the factory under the cover of the duplicate copy of the challan on which such inputs or partially processed inputs were removed from the factory.

 Provided that the manufacturer can take credit on the basis of triplicate copy of the challan, if the duplicate copy has been lost in transit, subject to the satisfaction of the Assistant Commissioner of Central Excise.

(v) Where the inputs or the partially processed inputs removed under sub-rule (3) are not received back within a period of sixty days or further extended period as the Assistant Commissioner of Central Excise may allow in this behalf, the manufacturer shall recalculate the amount of actual credit attributable to such inputs or on inputs contained in such partially processed inputs and shall adjust the differential amount, if any, after taking into account the amount already debited under this sub-rule, in the account maintained under sub-rule (3) of rule 57G or in the accounts maintained under rule 9 or sub-rule (1) or rule 173G."

(iii) in rule 7, -

(a) for the brackets, letter and words "(b) an invoice issued by the manufacturer of inputs from his depot;" the following shall be substituted, namely :-

"(b) an invoice issued by the manufacturer of inputs from his depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer provided the depot or the premises, as the case may be is registered under rule 174;"

(b) for the brackets, letter and words "(g) an invoice issued by a dealer (other than a first or second stage dealer) if such invoice has been issued on or before the 31st day of August, 1996;" the following shall be substituted, namely :-

"(g) an invoice issued by a dealer on or before the 31st day of August, 1996";

(c) for the brackets, letter and words "(i) an invoice issued by a dealer of imported goods registered under rule 174 and duly authenticated by the proper officer;" the following shall be substituted, namely :-

"(i) an invoice issued by a first stage or second stage dealer of imported goods registered under rule 174 and duly authenticated by the proper officer";

(d) for the brackets, figures and words "(ii) no credit of duty paid on inputs shall be taken after the 30th September, 1996 on inputs received in the factory under the cover of an invoice issued on or before the 1st day of September, 1996 by a dealer of excisable goods or imported goods other than a first stage or second stage dealer;" the following shall be substituted, namely :-

"(ii) in respect of invoices referred to in sub-clause (g) of clause (i) of this proviso, no credit of duty paid on inputs shall be taken after the 30th September, 1996";

(e) for the portion beginning with brackets, figure and words `(1) "First stage dealer" means a dealer who purchases' and ending with words, letters and figures "invoice issued under rule 52A or rule 100E", the following shall be substituted, namely :-

"(1) "First stage dealer" means a dealer who purchases the goods either directly from the manufacturer under the cover of an invoice issued under rule 52A or rule 100 E 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 issued under rule 57G or from an importer directly."