Amendments in the CENVAT Credit Rules, 2002 - 025/2003 - Central Excise - Non Tariff

Amendments in the CENVAT Credit Rules, 2002 

NOTIFICATION NO. 25/2003-CE(N.T.)   DATED 25/03/2003

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2002, namely:-

1. (1) These rules may be called the CENVAT Credit (Third Amendment) Rules, 2003.

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

2. In the CENVAT Credit Rules, 2002,-

(i) in rule 2, for clause (h), the following clause shall be substituted, namely,-

'(h) "manufacturer" or "producer" in respect of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act, includes a person who is liable to pay duty of excise leviable on such goods under sub-rule (1) of rule 12B of the Central Excise Rules, 2002;';

(ii) in rule 4, in sub-rule (1), for the proviso, the following shall be substituted, namely,-

"Provided that in respect of the final products, namely, yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the 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 gets such final products manufactured on his account on job work subject to condition that the inputs are used in the manufacture of such final product by the job worker.";

(iii) in rule 6, in sub-rule (1), the following proviso shall be inserted, namely,-

"Provided the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12 B 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."

(iv) in rule 7, in sub-rule (1), after clause (d), the following shall be substituted, namely,-

'(e) any of the document referred to in clauses (a) to (d) issued in the name of a person undertaking activities pertaining to manufacture of yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60 or readymade garments falling under Chapter 61 or 62 of First Schedule to the Tariff Act, which is either fully exempt from duties of excise or are chargeable to "Nil" rate of duty or the said activity not being amounting to manufacture, being endorsed by the said person to any other manufacturer, producer, first stage dealer or second stage dealer.

Explanation:- For the removal of doubt, it is clarified that the manufacturer, producer, first stage dealer or second stage dealer, as the case may be, in whose name such endorsement has been made, shall not be denied the credit merely on the grounds that the description of the goods mentioned in such an endorsed document has undergone a change on account of such an activity been undertaken by such person on the said goods.';

(v) after rule 9, the following rule shall be inserted, namely,-

"Rule 9A. Transitional provisions for Textile and Textile Articles.- (1) A manufacturer, producer, first stage dealer or second stage dealer of yarn and unprocessed fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58, 59 or 60 of the First Schedule to the Tariff Act or a manufacturer of processed fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58, 59 or 60 of the First Schedule to the Tariff Act shall be entitled to avail credit equal to the duty paid on inputs of such finished product, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of inputs (whether lying in stock or in process or contained in finished products lying in stock) and subject to availability of the document evidencing actual payment of duty thereon.

(2) Notwithstanding anything contained in sub-rule (1), the manufacturer, producer, first stage dealer or second stage dealer, as the case may be, referred to in the said sub-rule, who is unable to produce the document evidencing actual payment of duty, shall be entitled to avail credit, calculated in a manner referred to in sub-rule (3), on inputs falling under Chapters 50 to 63 of the First Schedule to the Tariff Act, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of each of such goods. The declaration made under this sub-rule shall exclude quantity of stock declared under sub-rule (1).

(3) (a) The credit of duty on each such input lying in stock and in process shall be calculated on the basis of such rate as may be notified by the Central Government in this behalf, having regard to the average price of such inputs, and the applicable rate of duty and the quantity of input as declared by the assessee under sub-rule (2).

(b) The credit of duty on inputs contained in the fabrics lying in stock as on the 31st day of March, 2003 shall be calculated in the following manner, namely:-

(i) where the inputs and the finished products are covered under notification No. 52/2001-Central Excise (NT) dated the 29th June, 2001, subject to such conditions as prescribed under the said notification, the credit shall be equal to the such rate of credit as may be notified by the Central Government in this behalf, multiplied by the quantity of such finished product as declared by the assessee; or

(ii) where the inputs and the finished products are covered under notification Nos. 54/2001- Central Excise (NT) dated the 29th June, 2001, or 6/2002- Central Excise (NT) dated the 1st March 2002, subject to such conditions as prescribed under the said notifications, the credit shall be equal to the product of,-

(A) the applicable percentage credits in terms of the said notifications;

(B) the value of such finished product declared by the assessee; and

(C) the duty rate applicable to such final product in terms of Notification No. 7/2003- Central Excise dated 28.2.2003 .

Explanation:-For removal of doubt, it is hereby clarified that the entire amount of credit as eligible under sub-rule (1) and/or (2) shall be calculated by the assessee himself who can take credit accordingly. ".

F.No. B-3/ 1 /2003-TRU

Footnote.- The principal rules were published in the Gazette of India vide notification No. 5/2002-Central Excise (N.T.), dated the 1st March, 2002, GSR 144 (E), dated the 1st March, 2002, notification No. 13/2003-Central Excise (N.T.), dated the 1st March, 2003, GSR 153(E), dated the 1st March, 2002, and were last amended vide NTF. NO. 28/2003-CE(N.T.), DT. 01/04/2003.