Amendment to Rules - 25/87 - Central Excise - Tariff

Amendment to Rules

Notification No. 25/87-C.E.

Dated 1-3-1987

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 Rules, 1944, namely :-

1. (1) These rules may be called the Central Excise (First Amendment) Rules, 1987.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.

2. In the Central Excise Rules, 1944 (hereinafter referred to as the said rules), in rule 9, in the third proviso, for clause (ii), the following clause shall be substituted with effect from the 1st day of April, 1987, namely :-

"(ii)  is classifiable under heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as may be specified in the notification issued under sub-rule (1) of rule 56A.".

3. In rule 49 of the said rules, in sub-rule (4), for clause (ii) the following clause shall be substituted with effect from the 1st day of April, 1987, namely :-

"(ii)   is classifiable under heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), as may be specified in the notification issued under sub-rule (1) of rule 56A, and".

4. In rule 56A of the said rules, —

(a) in sub-rule (1), for the words "excisable goods", the words "finished excisable goods, falling under heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and the material or component parts falling under the heading No. or sub-heading No. of the said Schedule required for the manu­facture or more convenient distribution of such goods" shall be substituted with effect from the 1st day of April, 1987.".

(b) in sub-rule (2), in the first proviso, clause (ii) shall be omitted with effect from the 1st day of April, 1987.

(c) in sub-rule (3), for clause (via), the following clause shall be substituted, namely :-

"(via) The credit of duty allowed in respect of any material or component parts, and lying unutilised with a manufacturer immediately before obtaining the dated acknowledgement of the declaration made under rule 57G, may be transferred to his account in form RG-23A:

Provided that permission for such transfer of credit has been obtained from the Collector of Central Excise in terms of rule 57A.";

(d) in sub-rule (8), for the proviso, the following proviso shall be substituted, namely :-

"Provided that no such credit shall apply in respect of any material, component parts or finished product, if such credit was not allowable under this rule immediately before the commencement of the Central Excise Tariff Act, 1985 (5 of 1986).".

5. In rule 57A of the said rules, —

(a) in sub-rule (1), in the Explanation, after clause (iv), the following clause shall be inserted, namely :-

 "(v) plywood for tea chests.".

6. For rule 57E of the said rules, the following rule shall be substituted, namely :-

"57E. Adjustment in duty credit.— If duty paid on any inputs in respect of which credit has been allowed under rule 57A, is varied subsequently —

(i) due to any reason resulting in payment of refund to the manufacturer or the importer of the inputs; or

(ii) due to change in the classification of the inputs on the basis of instructions issued by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) resulting in recovery of more duty from the manufacturer or the importer of the inputs,

the credit allowed shall be varied accordingly 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, and if such adjustment is not possible for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the credit under rule 57A.".

7. In rule 57F of the said rules, in sub-rule (3), for the proviso, the following proviso shall be substituted, namely :-

"Provided that the credit of specified duty in respect of inputs used in the final products cleared for export under bond shall be allowed to be utilised towards payment of duty of excise on similar final products cleared for home consumption on payment of duty and, where for any reason, such adjustment is not possible, by refund to the manufacturer subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the Official Gazette :

Provided further that no such refund of credit of duty shall be allowed if the manufacturer avails of drawback allowed under the Customs and Central Excise Duties (Drawback) Rules, 1971, or claims rebate of duty under rule 12A, in respect of such duty.".

8. In rule 57G of the said rules, in sub-rule (2), in the first proviso, for the words "accompanied by a Gate Pass" the words "accompanied or followed subsequently within such period as the Collector of Central Excise may specify in this behalf by a Gate Pass" shall be substituted.

9. In rule 57H of the said rules, —

(a) for sub-rule (1), the following sub-rule shall be substituted, namely :-

"(1) Notwithstanding anything contained in rule 57G, the Assistant Collector of Central Excise may allow credit of the duty paid on inputs received by a manufacturer immediately before obtaining the dated acknowledgement of the declaration made under the said rule if he is satisfied that —

(i) such inputs are lying in stock or are received in the factory on or after the 1st day of March, 1987, or

(ii) such inputs are used in the manufacture of final products which are cleared from the factory on or after the 1st day of March, 1987,

and that no credit has been taken by the manufacturer in respect of such inputs under any other rule or notification.";

(b) for sub-rule (3), the following sub-rule shall be substituted, namely:-

"(3) On an application from a manufacturer who had been immediately before filing a declaration under rule 57G, availing of, —

(a) the special procedure under rule 56A in respect of materials or component parts for use in the manufacture of finished excisable goods; or

(b) an exemption for giving credit with respect to the duty paid on the materials or component parts used in the manufacture of finished excisable goods, the Collector may permit such manufacturer to transfer the credit of duty paid on the said materials or component parts received by such manufacturer and lying unutilised immediately before obtaining the dated acknowledgement of the declaration made under rule 57G in his account in RG-23 to his account in RG-23A :

Provided that the materials and component parts and the finished excisable goods have been specified as inputs and final products, respectively, in the notification issued under rule 57A.".

10. In Chapter V of the said rules, after Section AA, the following Section shall be inserted, namely :-

"AAA Credit of money in respect of certain raw materials used in the manufacture of certain excisable goods.

57K. Applicability and extent of credit.— (1) The Central Government may by notification in the Official Gazette, specify —

(a) the finished excisable goods (hereinafter referred to as "final products") and the raw materials used in the manufacture of such final products (hereinafter referred to as "inputs"), to which alone the provisions of this section shall apply; and

(b) the rates at which the credit of money is to be given for use of such inputs in the manufacture of final products.

(2) When a notification has been so issued under sub-rule (1), credit at rates specified therein may be allowed for use of such inputs in the manufacture of such final products and the credits so allowed may be utilised for payment of duty on the final products, subject to the provisions in this Section and the conditions if any, stipulated in the said notification.

57L. Credit not to be allowed if final products are exempt.— No credit of money on the inputs used in the manufacture of the final products shall be allowed if the final products are exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty.

58M. Credit not to be denied or varied in certain circumstances.— (1) Credit of money in respect of any inputs shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by-product arising during the manufacture of the final products, whether or not such waste, refuse or by-product is exempted from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty or is not specified as final products; and

(2) Credit of money allowed in respect of any inputs shall not be denied or varied on the ground that any intermediate product has come into existence during the course of manufacture of the final products and that such intermediate products are for the time being exempted from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty :

Provided that such intermediate products are used within the factory of production in the manufacture of final products on which duty of excise is leviable whether in whole or in part.

57N. Manner of utilisation of the credit.— (1) Credit of money allowed in respect of any inputs may be utilised towards payment of duty of excise on the final products in or in relation to the manufacture of which such inputs are intended to be used in accordance with the provisions the declara­tion filed under rule 57O :

Provided that the credit in respect of inputs used in the final products cleared for export under bond shall be allowed to be utilised towards the payment of duty of excise similar final products cleared for home consump­tion on payment of duty.

(2) No part of the credit allowed shall be utilised save as provided in sub-rule (1).

57O. Procedure to be observed by the manufacturer.— (l) Every manufacturer intending to take credit under this section shall file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used in each of the said final products and such other information as the said Assistant Collector of Central Excise may require and obtain a dated acknowledgement of the said declaration.

(2) A manufacturer who has filed a declaration in sub-rule (1) may, after obtaining the acknowledgement aforesaid, take credit of money on the inputs :

Provided that no credit shall be taken unless the inputs are manufactured in the factory of manufacture of the final product or are received in the factory under a proper invoice or despatch note indicating the name and address of the supplier of the inputs :

Provided further that the manufacturer shall ensure that the supplier is normally manufacturing or trading in such inputs and the name and address shown on the invoices are correct.

(3) A manufacturer of the final product shall maintain an account in Form RG 23B, Part I and II.

(4) A manufacturer of the final products shall submit a monthly return to the Superintendent of Central Excise indicating the particulars of the inputs used during the month and the amount of credit taken, along with extracts of Parts I and II of RG 23B.

(5) A manufacturer of final products shall, on demand by the proper officer, submit the invoices under which the inputs have been received.

57P Disallowance of credit.— If. (a) the credit on inputs has been taken wrongly; or (b) inputs in respect of which credit has been taken are not used in the manufacture of the final products for which such goods have been declared under the rule 57O, the credit so taken may be disallowed by the proper officer and the amount so disallowed shall be adjusted in the credit account or the account current maintained by the manufacturer under rule 9 or sub-rule (1) of rule 173G, or if such adjustments are not possible for any reason, by cash recovery from the manufacturer of the final products :

Provided that such manufacturer may make such adjustments on his own in the credit account or account current maintained by him under intimation to the proper officer.".

11. In rule 173 G of the said rules, in sub-rule (1), in clause (bb), for the words "credit of duty", wherever they occur, the words "credit of duty or money" shall be substituted.

12. In rule 209 of the said rules, in sub-rule (1), in clause (bb), for the words "credit of duty", wherever they occur, the words "credit of duty or money" shall be substituted.

13. In appendix I to the said rules, —

(a) in "(1) list of Central Excise Forms", after entry 55GG, the following entry shall be inserted, namely :-

(1)	(2)	(3)	(4)
"55GGG	Credit of money for use of certain inputs in the manu­facture of excisable goods.	57 O	RG 23B";

(b) in "Specimen Form", after Form RG 23A (Central Excise Series No. 55GG), the following Form shall be inserted, namely :-

"CENTRAL EXCISE series 55 GGG

FORM R.G. 23A

PART I

Stock Account of inputs for use in or in relation to the manufacture of 'final products'

[Rule 57 O]

S. No.	Date	Description of inputs received	Quantity Received	Invoice No. and date
(1)	(2)	(3)	(4)	(5)

 

Name and address of the supplier from whom the inputs are received	ISSUES (7 to 9)			Balance
	Chit No. and date	For manufacture of final products	Others
(6)	(7)	(8)	(9)	(10)

 

Loss in process	Quantity for which credit is eligible	Date on which corresponding credit is taken in Form II.	Central Excise Officer's initials	Remarks
(11)	(12)	(13)	(14)	(15)

"Part II - Entry Book of Duty Credit

S. No.	Date	Opening Balance of duty in credit	Fresh Credit Allowed (4 to 7)
			Descrip­tion of in­put used	Quantity of in­put eligible for credit		Rate of credit	Credit taken
(1)	(2)	(3)	(4)		(5)	(6)	(7)

 

	DEBIT (9 AND 10)
Total credit available	ARR/GPI/Other approved document No. and date	Amount of duty debited	Balance of credit	Central Excise Officer's Initials	Remarks"
(8)	(9)	(10)	(11)	(12)	(13)

[Notification No. 25/87-C.E., dated 1-3-1987]