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TMI BlogCentral Excise Guide for the new registrantsX X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Ø 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. Ø The contents of this Guide are as per the statutory provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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 (CODI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Interest- At a glance 48 V Frequently Asked Questions (FAQ) 53 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 Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toring non-duty paid goods. (iv) Persons who obtain excisable goods for availing end-use based exemption. (v) Exporter-manufacturers under rebate/bond procedure; (vi) Export Oriented Units and EPZ units. 2.2 Exemption from registration: The following categories of persons are exempt from registration as per Notification No. 36/2001 CE (NT) dated 26-6-2001 issued under Rule 9. (i) Manufacturers of goods which are chargeable to nil rate of duty or fully exempted by any Notification subject to the condition that they file a Declaration with the Department. However, such Declaration need not be filed if value of clearances made in the preceeding financial year was below the specified exemption limit i.e. Rs. 90 lakhs or, in the case of a new factory or manufacturer, such value of clearances is estimated to remain less than Rs. 90 lakhs in the current financial year. (ii) Persons (except the persons who get certain textile items manufactured on job work) who get their goods manufactured by others. (iii) Persons manufacturing excisable goods under the Customs warehousing procedures, subject to certain conditions. (iv) persons who carry on wholesale trade or deals in excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication. The classification of an item is generally decided in accordance with the commercial or trade parlance. However, a deviation from this principle is made when the trade meaning or commercial nomenclature does not fit in the scheme of the statute. For determination of the rate of duty of a manufactured product, the assessee has to primarily ascertain the relevant Tariff Heading or sub-heading under which the said product is covered. Against each Tariff sub-heading, the rates of Excise duty are specified which are commonly known as Tariff rates. While classifying the excisable goods, the specific heading is to be preferred over a general heading and if there are two specific headings for the product, the one occurring later would prevail. Duty is payable at the rates prescribed in the Tariff. However, in respect of cases where there is any exemption by virtue of a Notification relating to the goods in question, the actual rate of duty (effective rate of duty) is to be worked out after taking into consideration the relevant exemption Notification, subject to the conditions, if any prescribed therein. 3.3 Valuation of the goods: Value of the excisable goods has to be determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. For details about the specified goods and the prescription of Tariff value, the relevant Notifications issued under Section 3(2) of the Act may be referred to. 4. EXEMPTION FROM PAYMENT OF DUTY The Central Government is empowered to grant exemption, full or partial, from payment of duty either generally by issue of a Notification or in a specific case of an exceptional nature by means of a special order under Section 5A of the Act. The exemption Notifications are issued in respect of certain specified goods or certain categories of assessees or for certain specified purposes. In respect of conditional exemptions, it is imperative that the conditions specified in the relevant Notification are to be strictly adhered to. 4.1 Small scale exemption: The Notification No. 8/2003 CE dated 1-3-2003 as amended provides full exemption from payment of duty to the small scale units upto the aggregate value of clearance of Rs. 150 lakhs in a financial year. The salient features of the exemption scheme are highlighted as below: (i) The aggregate value of clearance of all excisable goods cleared for home consumption by a manufacturer from one or more factories, or from a factory by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be marked as DUPLICATE FOR TRANSPORTER; Ø the triplicate copy is to be marked as TRIPLICATE FOR ASSESSEE. The assessee may make more than three copies for his other requirements. But the extra copies shall be prominently marked with the words: "NOT FOR CENVAT PURPOSE." 5.2 Use of more than one set of invoices: As per Rule 11, only one set of invoice book shall be in use at a time unless otherwise allowed by the Deputy/Assistant Commissioner of Central Excise in the special facts and circumstances of each case. Where the assessee requires two different sets of invoice books for the purpose of removals for home consumption and removals for export, they may do so by intimating the jurisdictional Deputy/Assistant Commissioner of Central Excise. When an assessee is allowed to keep more than one set of invoice book, he should keep different numerical serial numbers for the different sets. Before making use of the invoice book, the serial numbers of the same shall be intimated to the jurisdictional Superintendent of Central Excise in writing. 5.3 Authentication of Invoices: The owner or working partner or Managing Director or Company Secretary or any person duly authorized in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of payment offered by the banks under specific security norms of the Reserve Bank of India. This scheme facilitates anytime, anywhere payment enabling instant generation of cyber receipt once the transaction is complete. It provides the convenience of making online payment of Central Excise duty through Bank's Internet banking service. 6.3 Procedure for Payment: ¨ The customer should log on to the Bank's Internet site after entering the user Id and password provided to them by the Bank. ¨ They should fill in the on-line Challan. ¨ The customer should select the appropriate type of tax from the pop up menu and enter the duty amount. ¨ Thereafter, the Challan should be submitted electronically. ¨ The customer has to enter his User Id and Password to enter the secured e-banking area. ¨ The customer should select the account for debiting the total tax amount and authorize the payment. 6.4 Advantages of e-filing: Ø Ease of operation and convenience. Ø Facility is available 24x7. Ø No queue and waiting. Ø Online filling of single Challan. Ø Minimum fields of the Challan need to be filled. Most of the fields are populated automatically. Ø Selection of tax type is from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to furnish to the Range Officer, a list in duplicate, of all the records prepared or maintained by him for accounting of transactions with regard to receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods. The assessee shall, on demand make the records available to the Range officer duly empowered by the Commissioner or the Audit party deputed by the Commissioner or the Comptroller and Auditor General of India in terms of Rule 22(3) 7.2 Electronic maintenance of records and preparation of Returns & documents: The assessee may maintain or generate all or any of the records, returns, invoices and other documents prescribed under the statute, using a computer, in electronically readable format. No specific permission from the Central Excise Department is required for this purpose. Such person is also not required to furnish any intimation to the Department in this regard. The records can be kept and preserved on any electronic media, such as hard disk of the computers, floppies, CDs or tapes. The print outs (hard copy) of the records and documents must be taken out at the end of each month and kept in bound folders, separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Returns prescribed: Return Annexure of CBEC's Supplementary Instructions/ Notification ER-1 Annexure 12 ER-2 Annexure 13 ER-3 Annexure 13A ER-4 Annexure 13AA ER-5 Annexure 13AB ER-6 Annexure 13AC ER-7 Notification No. 39/2008 CE(NT) dated 29.09.2008 Dealers Return Annexure 13B 9. DEMAND OF DUTY AND ERRONEOUS REFUNDS 9.1 Demand Notice: If the duty has not been levied or not paid or short levied or short paid or erroneously refunded, the Department is empowered to demand the same under Section 11A (1) of the Act. The notice would be issued detailing the basis of such demand and providing an opportunity to show cause as to why the proposed action in the notice should not be initiated against the noticee. The noticee would also be given an opportunity to putforth the arguments in person before the adjudicating authority at the time of personal hearing. The arguments in defence of the noticee in writing and oral submissions would be taken into consideration by the adjudicating authority while passing the order under Section 11A (2) of the Act. If the assessee is aggrieved of the order, he can seek remedy in the higher Appellate forum as explained in Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pre-deposit: The time limit of one year is not applicable where the amount was predeposited under Section 35F of the Act for availing the right of appeal or where duty had been paid under protest or where refund arises out of quasijudicial orders passed in adjudication, Appeal or revision or out of Court judgments. For refund of the pre-deposits under Section 35F of the Act, a simple letter of the person who had made such pre deposit would suffice. Refund of predeposit will be given within 3 months from the date of the order passed by the Appellate Tribunal / Court or other Final Authority unless there is a stay granted by a superior Court. 10.3 Unjust enrichment: Refund will be granted to the claimant only if he has not passed on the incidence of duty to any other person. Otherwise, the refund amount would be sanctioned and credited to the Consumer Welfare Fund. The onus of proof that he has not passed on the incidence of duty to any other person is on the claimant. The buyer of the goods who has ultimately borne the tax incidence has the right to claim the refund within one year from the date of purchase of the goods by him. 10.4 Exclusion from unjust enrichment: The fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner in terms of Rule 19. This facility of export under bond is also available for export to Nepal and Bhutan, if payment for the same is made in freely convertible currency. The goods manufactured from the inputs obtained under bond should be exported only under bond and not under the rebate procedure. The conditions, safeguards and procedures for export under Bond are prescribed in the Notifications issued under Rule 19 read with Chapter 7 of CBEC's Supplementary Instructions. 11.3 Procedures for Export of goods without payment of duty: The exporter intending to avail the facility to export the goods without payment of duty shall furnish a bond in Form B-1 on a non-judicial stamp paper of appropriate value (as applicable in the State in which the bond is being furnished). The manufacturer exporter may furnish Letter of Undertaking (LUT) in Form UT-1 in lieu of the bond, which is valid for one year. Where the export is effected by the Merchant-Exporter, bond has to be necessarily furnished and clearances will not be allowed based on the LUT of the manufacturer. It is, however, open for the manufacturer to furnish the bond on behalf of the Merchant-exporter in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also be stated in the said intimation letter. The assessee would be consulted at every stage of the audit and provided adequate opportunity to explain his point of view on any particular issue so that matters are resolved instantly in full appreciation of the legal position. EA 2000 is thus a participative and taxpayer friendly audit. 12.2 Audit objections: The instances of short payment of duty or non-compliance of the legal procedures would be recorded as 'Audit Para' in the 'draft audit report' that would be prepared at the end of the verification process. The audit report would contain the issue in brief, quantification of the short payment, the point of view of the assessee, the arguments of the audit for non-acceptance of the reply etc. The Audit report containing the audit objections would be issued after thorough examination of the issue in all respects. The jurisdictional Range officer will initiate appropriate action to protect the interests of revenue by observing the principles of Natural justice. 12.3 Spot settlement of Audit objections: The assessees may, at their option, prefer to make payment of the non-levy or short levy as pointed out by the Audit along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer may detain or seize such goods. 13.2 Provisional release: The power to release seized goods emanates from the power to seize itself. The goods seized may be released provisionally by the officer who is normally competent to adjudicate the case on execution of the Bond (B-8 bond) along with 25% security or surety. The adjudicating officer will take into consideration the importance of such goods for evidence while releasing the goods provisionally. Sample would also be drawn, if necessary. The adjudicating officer may, however, require the owner or in-charge of the goods to whom the goods are provisionally released, to produce the goods any time before issue of the adjudication order. If the adjudicating authority is of the view that the goods are liable for confiscation and when the concerned person to whom goods were provisionally released fails to produce the goods at the appointed time, the bond would be enforced for recovery of the dues. 13.3. Summon: A Gazetted Officer of Central Excise (Superintendent and above) is empowered to summon any person for giving evidence or producing documents necessary for any inquiry conducted by the said officer for the purpose of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is greater. The penalty under Rule 25 is subject to the provisions of Section 11 AC of the Act. The offending goods are also liable to confiscation. The specified contraventions are as listed below: (a) Removal of excisable goods in contravention of any of the legal provisions of the Rules or the Notifications issued thereunder; or (b) Non-accountal of any excisable goods produced or manufactured or stored; or (c) Manufacture, production or storage of any excisable goods without having applied for the registration certificate required under Section 6 of the Act read with the Rule 9 of the CER; or (d) Contravention of any of the legal provisions of the Rules or the Notifications issued thereunder with intent to evade payment of duty. Rule 26 of the Central Excise Rules, 2002: The person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or the said Rules, shall be liable to a penalty not exceeding the duty on such goods or Rs. 2000/- , whichever is great ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether in a factory or in a warehouse; = Rebate of duty of Excise on export goods or on excisable materials used in the manufacture of goods which are exported; = Goods exported outside India (except Nepal or Bhutan) without payment of duty; = Credit of any duty allowed to be utilized towards payment of Excise duty on final products under the provisions of this Act or the Rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under Section 109 of the Finance (No.2) Act, 1998. Commissioner or Commissioner(Appeals) Revision Application to Central Govt. (on matters relating to baggage, drawback, export without payment of duty, goods short landed, loss of goods in transit). No further Appeal. CESTAT Supreme Court (Classification and Valuation cases) CESTAT High Court (Other than classification and valuation matters) High Court Supreme Court 16. MISCELLANEOUS MATTERS 16.1 Visit of the Central Excise Officers: The visit to units would be made by the Officers of the rank of Inspectors and Superintendents with the prior permission of the Assistant/Deputy Commissioner in writing. The Central Excise assessees are required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail the Cenvat credit for payment of Service Tax on the output services provided by him. Cenvat credit is admissible on the (i) inputs, (ii) capital goods and (iii) input services. 2.1 Inputs (defined under Rule 2 (k) of the CCR): The following goods are entitled to credit under the category of inputs: (i) All goods except H.S.D, L.D.O. and petrol used within the factory of production in or in relation to manufacture of final products directly or indirectly and whether contained in the final product or not, and includes Lubricating oils, greases, cutting oils and coolants; accessories of the final products cleared along with the final product; goods used as paint, or as packing material or as fuel, or for generation of electricity or steam used in or in relation to the manufacture of final products or for any other purpose within the factory of production. 'Inputs' include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. (ii) All goods, except LDO, HSD or Petrol and Motor vehicles used for providing any output service. 2.2 Capital goods (defined under Rule 2 (a) of the CCR): The following goods are defined as Capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingent duty (NCCD); (vi) Education cess (2%) and Secondary and Higher Education Cess (1%) on Excise duty; (vii) Additional Customs duty (Section 3 of the Customs Tariff Act, 1975), commonly known as countervailing duty(CVD) and equivalent to Excise duty specified at (i), (ii), (iii), (iv), (v) and (vi) above; (viii) Additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act (Service provider cannot take credit of this additional duty) (ix) Additional duty of Excise leviable under Section 157 of the Finance Act, 2003; (x) Service Tax leviable under Section 66 of the Finance Act, 1994; and (xi) Education cess and Secondary and Higher Education Cess (1%) on Excise duty/ Service Tax paid on - a) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after 10-9-2004; and b) any input service received by the manufacturer of final product or by the provider of output services on or after 10-9-2004, including the said duties paid on any inputs or capital goods used in the manufacture of any intermediate products by the job worker of the assessee availing exemption under Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken in respect of the said input or capital goods. However, re-credit of the same would be allowed, if such inputs or capital goods are subsequently used in the manufacture of final products. In case of remission of duty under Rule 21 on any final products, Cenvat credit taken on the inputs used in the manufacture of such final products is to be reversed. The credit availed inputs or capital goods can be cleared as such for export under bond. 7. Restriction on availment / utilization of Credit (Rule 3(7)) of the CCR): The restrictions relating to availment of Cenvat credit are as shown below: (a) Credit of duty paid on inputs or capital goods produced by SEZ, FTZ, 100% EOU, EHTP, and STPI units and used in DTA is restricted as per the formula given in Rule 3 (7) of the CCR. (b) AED (T&TA), NCCD component of these duties, Education cess, Secondary and Higher Education Cess and AED (Tea & Tea waste) shall be utilized only for payment of the respective duties. (c) Utilization of Credit of AED (GSI) towards payment of BED will be applicable, only if the AED (GSI) was paid on or after 1-4-2000. (d) For the purpose of payment of Central Excise duty or Service Tax for the month o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CCR. * Credit is not allowed on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services except in the case of availment of value based exemption. 9. Obligation of the manufacturer of dutiable and exempted goods and provider of taxable and exempted services (Rule 6 of the CCR): If Cenvat credit is availed on the inputs or input services, which are used in the manufacture of both dutiable and exempted goods or rendering of both dutiable and exempted services, separate accounts of receipt, consumption and inventory of such inputs or input services are to be maintained. In such cases, Cenvat credit is to be taken only on that quantity of the inputs and input services used in the manufacture of dutiable goods/provision of services. If the manufacturer/ service provider does not maintain separate accounts, the following two options are available: (a) In case of manufacturer, he has to pay an amount equal to 10% of the value of the exempted goods. The service provider has to pay an amount equal to 8% of the value of the exempted services; or (b) The manufacturer/service provider shall pay an amount equivalent to the Cenvat c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to observance of the conditions and procedures. This order is valid for the particular financial year. 13. Refund of Cenvat Credit (Rule 5 of the CCR): The credit of duty paid on the inputs or input services used in the manufacture of the goods which are cleared for export under bond or Letter of Undertaking, or used in the intermediate goods cleared for export or used in providing output service which is exported, can be utilized for payment of duty on the goods cleared for home consumption or for export on payment of duty or for payment of Service Tax on the output service. If such adjustment is not possible, refund of such credit amount in cash is allowed, subject to the conditions specified in the Notification issued under Rule 5 of the CCR. 14. Documents and Accounts (Rule 9 of the CCR): Cenvat Credit can be taken based on the following documents: (a) An invoice issued by - (i) a manufacturer for clearance of - I. inputs or capital goods from his factory or 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; II. inputs or capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly or erroneously refunded, the same is liable to be recovered along with interest under Rule 14 of the CCR from the manufacturer/provider of output service and the provisions of Sections 11A and 11AB of the Central Excise Act, 1944 or Sections 73 and 75 of the Finance Act,1994, will apply mutatis mutandis. 19. Confiscation and penalty (Rule 15(1) and 15 (2) of the CCR): If any person takes Cenvat Credit for inputs or capital goods wrongly or contravenes any provisions of the CCR in respect of any inputs or capital goods, then, all such goods shall be liable to confiscation and such person shall also be liable for penalty not exceeding the duty on such goods for which contravention has been committed or Rs. 2,000/- whichever is greater. If Cenvat Credit is taken/utilized wrongly by fraud, wilful misstatement, collusion or suppression of facts, or contravention of any provisions of the Act / Rules, with intent to evade payment of duty, the manufacturer shall also be liable to penalty under Section 11AC of the Central Excise Act. If any person takes Cenvat credit for input services, wrongly or contravenes any of the provisions of these rules, such person shall be liable to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inputs/capital goods, which are sold or removed as such from the factory;. * Reverse the credit availed on the inputs used in the exempted goods; * Pay an amount equal to 10% of the value of the goods cleared at NIL rate of duty where Credit availed inputs are used both in dutiable and exempted goods; * Ensure that Capital goods or inputs sent for job work are received back within 180 days. DON'Ts * Don't take credit based on the ineligible documents such as extra copy, photo copy, credit note etc and documents which do not contain the required particulars; * Don't take credit more than once based on the same invoice; * Don't avail both Cenvat credit and depreciation under Income Tax Act on Capital Goods simultaneously - Double benefit not allowed. * Don't take CENVAT credit on the capital goods which are not covered under the definition of capital goods. * Don't avail 100% CENVAT credit on the capital goods in the same financial year instead of 50% * Don't avail Cenvat credit of Service Tax paid on the services which are not used for the manufacture of the final product. * Don't avail Cenvat credit of Service Tax paid on the outward freight beyond the place of remov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 39/2004 CE(NT) dated 25-11-2004 All assessees who have paid more than Rs. One Crore (PLA+ Cenvat) for the previous financial year; and those manufacturing goods falling under specified headings 10th of the month Monthly Return in Form ER-6 for the receipt and consumption of principal inputs during the previous month required to be filed under Rule 9A of the CCR read with Notifn. 39/2004 CE(NT) dated 25-11-2004 All assessees who have paid more than Rs. One Crore (PLA+ Cenvat) for the previous financial year; and those manufacturing goods falling under the specified headings. 30th April of every year Annual Installed Capacity Statement indicating the annual production capacity for the previous financial year in Form ER-7 required to be filed under Rule 12 (2A) of the CER. All Registered assessees IV. INTEREST AND PENAL PROVISIONS (i). Under the Central Excise Act, 1944: Section of the Act Contravention Quantum of Interest/ Penalty/ Other Sec. 9 (i) Contravention of Sec. 8 - Restriction on possession of excisable goods or variety of such goods as notified; (ii) transport of prohibited excisable goods; iii) Failure to obtain registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anction of refund beyond 3 months time from date of receipt of refund claim Interest @ 6% is payable by the Department Section11DD Interest on amounts collected in excess of duty Interest @ 15% (Notification No. 68/2003 CE(NT) dated 12-9-2003 Section11DDA Protection of revenue interest (Provisional attachment) Provisional attachment valid for six months. Attachment period extendable by Chief Commissioner upto 2 years. Section 22 Vexatious search or seizure by Central Excise officers without reasonable grounds. Fine upto Rs.2000/- Imprisonment upto 2 years or fine or both on any person for giving false information causing arrest or search. Section 23 Failure /refusal to perform duties of his office by any Central Excise officer Imprisonment upto 3 months or fine upto 3 months pay or both. Section 37E Proceedings or prosecutions under Central Excise Act in public interest. Publication of names and particulars of persons. No publication relating to penalty till appeal is filed/ disposed. (ii) Under the Central Excise Rules, 2002: Rule 8 Failure to pay duty by due date Interest @ 13% from first day after due date till payment of dues. Default f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "State Excise" duty. The Excise duty on rest of the goods is called "Central Excise" duty and is collected in terms of Section 3 of the Central Excise Act, 1944. Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods. 2. Whether a manufacturer or producer of goods is required to obtain a license from the Central Excise department for payment of Central Excise duty? No license is required and a simple registration with the Central Excise department would suffice. 3. What categories of persons are required to obtain registration with the Central Excise department? Subject to specified conditions, generally the following categories of persons are required to get themselves registered with the Central Excise department: (i) Every manufacturer of dutiable excisable goods; (ii) First and second stage dealers or importers desiring to issue Cenvatable invoices; (iii) Persons holding bonded warehouses for storing non-duty paid goods; (iv) persons who obtain excisable goods for availing end-use based exemption. 4. Is there any category of persons who are exempt from obtaining registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such exemption Notifications, are exempt from payment of duty till their aggregate value of clearances do not exceed Rs.1.5 Crores in a financial year. The Small-Scale units whose clearances in the previous financial year exceeded the limit of Rs.4 Crores (including the value of exempted goods but excluding the value of export clearences), are not entitled to such exemption. For further details, please consult the nearest Central Excise Range Office. 10. What is the period for filing returns by the assessee? An SSI unit is required to file returns on quarterly basis within 20 days from the date of completion of the quarter, but non-SSI units are required to file returns on monthly basis within 10 days from the date of completion of the month. 11. What action department takes for non-filing of returns? A penal action is envisaged on failure to file the returns in time. Penalty may extend upto Rs.5000/- 12. How and when Central Excise duty is to be paid? An SSI unit has to pay duty on monthly basis by 15th of the succeeding month (16th in case of e-payment). Other units are required to pay duty on monthly basis within 5 days (6 days in case of e-payment) of completion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient. However, in case of clearance of goods to Domestic tariff area (D.T.A.), Registration is required under the Act. 16. What benefit does a 100% Export Oriented Unit get from the Central Excise? Subject to prescribed conditions, no Excise/Customs duty is payable on the capital goods, raw materials, spares, consumables, etc imported/indigeneously procured by the 100% EOU. 17. What is the procedure to be followed for setting up a 100% EOU? On obtaining LOP from the Development Commissioner, a manufacturer is required to approach the Commissioner of Central Excise for declaration of the place as a warehousing station under Section 9 of the Customs Act. Thereafter, the manufacturer is required to obtain private bonded warehouse licence under Section 58 of the Customs Act and permission to manufacture goods under Section 65 of the Customs Act from the jurisdictional Deputy/ Assistant Commissioner. 18. What is CT-3 certificate and who issues it? CT-3 certificate is required to be obtained from the Range Superintendent of Central Excise on the basis of which a 100% EOU can procure duty free indigenous goods. 19. What is the periodical return to be filed by a 100% EOU and when? ..... X X X X Extracts X X X X X X X X Extracts X X X X
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