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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 ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 CODISSIA G.D. Naidu Towers , Huzur Road , Coimbatore - 641 018 MESSAGE Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of payment of duty 17 7 Records 19 8 Returns 20 9 Demand of Duty and Erroneous refunds 22 10 Refunds 23 11 Export procedures and benefits 25 12 Excise Audit (EA-2000) 27 13 Search, Seizure, Arrest and prosecution 28 14 Confiscation and Penalty 30 15 Appeal and Revision Application 32 16 Miscellaneous matters 33 II An Overview of the Cenvat Credit Rules, 2004 1 Important provisions relating to Cenvat Credit 34 2 DO's and DON'Ts on Cenvat Credit 45 III Dates to remember 46 IV Provisions relating to Penalty 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 Valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule to the Central Excise Tariff Act, 1985 as amounting to manufacture; or = any process, which, in relation to the goods specified in the Third Schedule to the Central Excise Tariff Act, 1985 involving any of the following activities: Ø packing or repacking of such goods in a unit container or Ø labelling or relabelling of containers (including the declaration or alteration of retail sale price on it) or Ø adoption of any other treatment on the goods to render the product marketable to the consumer. 2.REGISTRATION 2.1 Persons requiring registration: The categories of persons requiring registration under Central Excise in terms of Rule 9 are as follows: (i) Every manufacturer of dutiable excisable goods. (ii) First and second stage dealers (including manufacturer's depots and importers) desiring to pass on the Cenvat credit to the buyers by issuing Cenvatable invoices. (iii) Persons holding warehouses for storing 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: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in in force unless the same is suspended or revoked by the appropriate authority in accordance with the provisions of the law or surrendered by the registrant concerned. ( Notification no. 35/2001-Central Excise (N.T.) dated 26 th June, 2001 ). 3. LEVY OF CENTRAL EXCISE DUTY 3.1 Central Excise Tariff and rates of duty: The rates of Central Excise duty are specified in the First Schedule to the Central Excise Tariff Act, 1985. The First Schedule is commonly referred to as the Central Excise Tariff, which contains 96 Chapters grouped under 20 distinct Sections. The rates of Special Excise duty are specified in the 2 nd Schedule to the Central Excise Tariff Act, 1985 . 3.2 Classification of the goods: In order to determine the applicable rate of duty in respect of a particular item, the positioning of that item under a particular head or sub-heading of Central Excise Tariff is essential. The positioning of an item in the appropriate heading / sub-heading is classification. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Valuation Rules as indicated above will not be applicable when a product is notified under Section 4A of the Act or when tariff value is fixed for the goods under Section 3(2) of the Act as illustrated below: M.R.P. Value: In respect of packaged commodities which are required to be marked with Maximum Retail Price (MRP) of the product in terms of the provisions of the Standards of Weights and Measures Act, 1976, the assessment of the goods as notified by the Government under Section 4A of the Act shall be done on the basis of such MRP value, subject to admissibility of abatement, if any, as may be notified. The goods, which are liable to MRP assessment and the extent of abatement admissible in respect of those goods, are detailed in the Notification 49/2008-C.E. (N.T.) dated 24-12-2008 issued under Section 4A of the Act. Tariff value: In respect of certain specified goods, the assessment shall be based on the tariff value prescribed for such goods by the Central Government under Section 3(2) of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the document which indicates the assessment of duty. There is no prescribed format for the Invoice. However, the invoice should be serially numbered and shall contain the registration number, address of the concerned Central Excise Division, name of the consignee, description, classification, time and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value of the goods and the duty payable thereon. The serial number of the invoice can be given at the time of printing or by using franking machine. Hand written serial number is not acceptable. In case of computer generated invoice, the serial number is allowed to be generated and printed by the computer at the time of preparation of invoice, if the computer is capable of generating the number automatically and without the possibility of assignment of the same number more than once. The invoice shall be prepared in triplicate in the following manner, namely:- Ø the original copy is to be marked as ORIGINAL FOR BUYER; Ø the duplicate copy is to be marked as DUPLICATE FOR TRANSPORTER; Ø the triplicate copy is to be marked as TRIPLICATE FOR ASSESSEE. The assessee may make m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r certain purposes: The semi-finished goods or finished goods can be removed for further processing or testing under proper documents in terms of Rule 16B and Rule 16C. 6. PAYMENT OF DUTY 6.1 Manner of payment of duty: As per Rule 8, payment of duty is to be made on monthly basis by 5 th day (6 th day in case of e-payment) of the succeeding month. The duty for the month of March is, however, to be paid by 31 st March itself. In case of a manufacturer availing exemption based on the value of clearances during a financial year (SSI exemption), the duty for a month is liable to be discharged by 15 th day (16 th day in case of e-payment) of the succeeding month. The assessees may, at their option, make payment of duty consignment-wise. Once the assessee has deposited a cheque in bank within the due date and the same is honoured or pays in cash/draft and the bank gives receipt stamp on the GAR-7 Challan, the same shall be treated as credited to the account of the Central Government. 6.2 Electronic Payment: E-payment is a hassle-free mode of payment besides the conventional method of payment offered by the banks under specific security norms of the Reserve Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of payment of the outstanding amount including the interest. In the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in the Central Excise Act and Rules would follow. 7. RECORDS 7.1 Maintenance of Accounts: As a measure of simplification, the private records maintained by the assessees are accepted by the Department for the purpose of Central Excise matters also so as to facilitate them to have a single accounting system. The assessees are required to maintain records on all important aspects such as receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods, Daily Stock Account as per Rule 10 of the Central Excise Rules, 2002 and Cenvat Account as per Rule 9 of the Cenvat Credit Rules, 2004. The records, which are relevant for Central Excise, shall be authenticated by the assessee on the first and last page. These records shall be preserved for a period of five years immediately after the financial year to which such records pertain. In terms of Rule 22(2), the assessee is required to furnish to the Range O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30th April ER-6 Monthly Central Excise manufacturers who have paid more than Rs.1 crore (PLA+Cenvat) for the previous financial year. 10th of the following month ER-7 Annual Central Excise manufacturers. 30th April - Quarterly Dealers of Excisable goods. 15th of the month following the quarter 8.2 Electronic filing of Returns: E-filing facility is available for the assessee enabling him to file the returns online in a hassle-free manner. The registered assessees, who are desirous of availing the facility of e-filing of the return, may make an Application in this regard to their jurisdictional AC/DC indicating their e-mail address and postal address for communication to which the user log-in-ID, Password and the location code are to be intimated. After verification of the particulars, Systems Manager of the Commissionerate Hqrs. office will communicate the initial password to the assessee. The 15 digit R.C. Number will serve as assessee's user-id. The assessee can thereafter access the e-filing website: http:// exciseandservicetax.nic.in through internet and e-file the return. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us refund is by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules with intent to evade payment of duty, the time limit of one year can extend upto 5 years under the provisions of the proviso to Section 11A (1) of the Act. 10. REFUNDS 10.1 Refund application: The application for refund in terms of Section 11B of the Act is to be made to the jurisdictional Assistant/Deputy Commissioner in duplicate within one year from the relevant date. The refund claim should be complete in all respects containing the important details such as grounds for filing the refund claim, proof for payment of the duty amount concerned, worksheet for quantification of the refund amount and supported by relevant documents. The relevant date in respect of the manufacturer-assessee is generally the date of payment of duty. There are various relevant dates prescribed in Section 11B for export rebate, for goods returned for repairs etc. In case where the duty was paid provisionally, the relevant date shall be the date of adjustment of duty after the finalization of the assessment. In the case of goods exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -audit of the same in the Commissionerate Hqrs. The claims involving an amount below Rs. 5 lakhs would be sanctioned by the competent authority and later sent for post-audit. 10.6 Time limit for disposal of the claim: The refund claim would be disposed off within 3 months from the date of filing of the claim complete in all respects. If the claim is not disposed off within the stipulated period, the claimant would be entitled to interest at the rate of 6% per annum on the refund amount sanctioned. 11. EXPORT PROCEDURES AND BENEFITS In principle, exports should be relieved of all types of duties and taxes. With a view to facilitate the manufacturers of India to effectively compete in the International market, various export benefit schemes have been prescribed under the Central Excise Law. A few important schemes providing benefit for the Exports and the related procedures are as discussed below: 11.1 Rebate of Excise duty paid on the export goods and the materials used in the manufacture of such goods: Where any excisable goods are exported on payment of duty, the duty paid on such export goods and the material used in the manufacture of such export goods would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manufacture of goods exported under bond: Where the end-product is exported under bond, the Cenvat credit taken on the inputs used in the manufacture of the export goods can be claimed as refund, if the manufacturer is unable to use the credit for payment of duty on similar final products cleared for home consumption or for export on payment of duty or Service tax on output service. The conditions and procedures for claiming such refund are prescribed in Notification No. 5/2006 CE (NT) dated 14-3-2006 as amended, issued under Rule 5 of the Cenvat Credit Rules, 2004. 11.5 Simplified Export procedure for exempted Units: Small scale Units, which are availing full exemption from payment of duty under a Notification based on the value of clearances, are exempted from filing the export document in ARE-1 and execution of Bond so long they remain within the threshold limit of full exemption. Simplified export procedure is prescribed in Chapter 7 of CBEC's Supplementary Instructions. 12. EXCISE AUDIT 2000 12.1 The concept of EA 2000: EA 2000 is a modern, transparent and interactive method of Audit wherein the Auditor proceeds to conduct the audit after be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules 22 23 empower the authorized officer of the Department to search any premises, conveyance or other place. Rule 24 empowers the officer to effect seizure or detention of the excisable goods. Further, the provisions of the Customs Act, 1962 relating to search and seizure are made applicable to Central Excise matters by virtue of Section 12 of the Act read with Notification No.68/63 dated 4.5.1963. In terms of the aforesaid provisions, an officer not below the rank of the Inspector of Central Excise, with the written permission of the AC/DC, can search at any time, any premises or conveyance where he has reason to believe that excisable goods are manufactured, stored or carried in contravention of the provisions of the Act or Rules. There is no requirement for search warrant for conducting search of a registered premises or for stopping and searching of any conveyance in transit. In respect of other cases, search warrants are required to be issued by an Officer not below the rank of AC/DC for authorizing the search. The search would be carried out in the presence of two independent witnesses. The proceedings of the search and seizure would be recorded in the Mahazar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the arrest. 13.5 Prosecution: Besides the Departmental adjudication, prosecution may also be launched under Section 9 of the Act against persons who have committed any of the offences specified under this Section. In respect of offices committed by Companies, prosecution may be launched under Section 9AA of the Act, against any person, Director, Manager, Secretary or other officers of a company or partner/ proprietor of the firm, who is responsible for the conduct of the business of the company/firm and is found guilty of the offences under the Central Excise Act / Rules. 14. CONFISCATION AND PENALTY 14.1 Legal provisions relating to imposition of Penalty and confiscation: The statutory provisions relating to imposition of Penalty and confiscation are as indicated below: Section 11AC of the Act: Mandatory penalty equal to the duty not levied or paid or short paid or erroneously refunded is liable to be imposed, if the same is by reason of fraud or suppression of facts or mis-statement or contravention of the provisions of the Act /Rules with intent to evade payment of duty. However, in the event of payment of the duty and interest within 30 days of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Rule 9 of the Cenvat credit Rules, 2004 or contravenes any of the provisions of the Cenvat Credit Rules in respect of any inputs or capital goods shall be liable to a penalty not exceeding the duty on the said excisable goods or Rs.2000/- whichever is greater. The said excisable goods are also liable for confiscation. Rule 15 (2) of the Cenvat Credit Rules, 2004: If the aforesaid offence is on account of fraud or suppression of facts or misstatement or contravention of the provisions of the Act /Rules with intent to evade payment of duty, the manufacturer shall be liable to penalty equal to the duty involved in terms of the provisions of Section 11 AC of the Act. Rule 15 A of the Cenvat Credit Rules, 2004: A general penalty is liable to be imposed which may extend to Rs. 5000/- for contravention of the Rules. This penalty is attracted when no specific penalty is provided for under the Cenvat Credit Rules, 2004. 15. APPEAL AND REVISION APPLICATION The assessee as well as the Department is entitled to appellate remedies against the orders passed under the Central Excise Act and Rules framed thereunder. As per the provisions of Section 35 read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee is desirous of verifying the bonafides of the visitor. Proforma for Record of Visits of Central Excise Officers to Factories Central Excise Commissionerate: Coimbatore Division: Range: Name and address of the factory: Excisable goods manufactured: S.No Date of Visit Name of the Officer Designation Time of arrival at the factory (1) (2) (3) (4) (5) Purpose of Visit Time of departure from the factory Signature of the officer with date Signature of factory representative with date Remarks (6) (7) (8) (9) (10) Authority: Boards Circular No. 3/90 CX.6 (F. No. 208/148/89 CX.6) dated 24-1-1990, Cir. No. 19/92 CX.6 (F. No. 213/28/92 CX.6) dated 18-12-1992 and F. No. 201/ 07/2006 CX6 dated 31-3-2006. PART- II: AN OVERVIEW OF CENVAT CREDIT RULES, 2004 1. IMPORTANT PROVISIONS RELATING TO CENVAT CREDIT 1. The concept of Cenvat credit: Excise duty is paid on the manufactured goods. The final product of a manufacturer is used by another person as input or capital goods or consumable for production/manufacture of his goods. Whe ..... 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Refractories and refractory materials; (vi) Tubes, pipes and fittings thereof; and (vii) Storage tank, used (1) in the factory of the manufacturer of the final products but does not include any equipments or appliances used in an office; or (2) for providing output service (viii)Motor vehicle registered in the name of the service provider of for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of Section 65 of the Finance Act, 1994 (The specified services are relating to Courier agency, Tour operator, Rent-a-cab operator, Cargo handling Service, Goods transport Agency, Outdoor Caterer, Pandal or Shamiyana Contractor). 2.3 Input service (defined under Rule 2 (l) of the CCR): Input Service is any Service - (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year shall pay an amount equal to the credit for the inputs lying in stock or used in the finished goods lying in stock on that date. Balance amount in credit account shall lapse and will not be allowed to be used for payment of duty. A unit availing SSI exemption is eligible to switch over to Cenvat scheme after crossing the SSI limit or any time before that. While doing so, Cenvat credit can be taken on the stocks of raw material, stock in process and contained in the finished goods. 5. Utilization of the credit (Rule 3(4) of the CCR): Ø The Cenvat credit can be utilized for the following purposes: Ø For payment of Excise duty on any final products (including waste and scrap); or Ø For payment of duty on inputs or capital goods removed as such or inputs removed after being partially processed, under invoice; or Ø For payment of Service Tax on any output service. 6. Removal of Credit availed inputs/capital goods (Rule 3(5) of the CCR): When inputs or capital goods on which Cenvat credit has been taken are removed as such from the factory or premises of the provider of output service, the manufacturer of the final products or provider of output service as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or full exemption on condition of non-availability of Cenvat credit shall prevail over the provisions of the Cenvat Credit Rules, 2004. 8. Conditions for allowing Cenvat Credit (Rule 4 of the CCR): Rule 4 of CCR provides for different conditions for allowing Cenvat credit in different situations for inputs and capital goods. The conditions for allowing Cenvat credit are shown below: Credit of duty paid on the inputs is available immediately on receipt of the inputs in the factory of the manufacturer/premises of the output service provider. Cenvat Credit in respect of input service would be allowed on or after the date payment is made for the value of input service and the Service Tax as indicated in the invoice/bill/Challan. * Credit is allowed even if capital goods are acquired on lease, hire purchase or loan agreement from a financing company. * Credit is not allowed, if depreciation is claimed on the amount of duty paid under Section 32 of the Income Tax Act. * Cenvat credit is allowed in respect of jigs , fixtures, moulds and dies sent by a manufacturer of final products to a job worker for the production of goods on his behalf and according to his spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % of the value prescribed under Rules 6 (1), 6 (2) and 6 (3) of the CCR shall not apply for exempted goods cleared to the following categories: (i) SEZ Unit; (ii) 100% EOU; (iii) EHTP, STPI unit; (iv) United Nations or an International Organization for their official use or supplied to projects listed under Notification No.108/95-C.E; (v) for export under bond under Rule 19 of the CER; (vi) gold or silver arising in the course of manufacture of copper or zinc by smelting; or (vii) all goods which are exempt from the basic duties of Customs and the Additional duty (CVD) when imported into India and supplied against International competitive bidding in terms of Notification No. 6/2006-C.E dated 1.3.2006. 10. Movement of inputs/capital goods (Rule 5(5)(a) of the CCR): Credit is allowed, even if any of the inputs or capital goods as such (or input after being partially processed) are sent to job worker for certain specified purposes. The goods are, however, to be received back in the factory within 180 days; otherwise, an amount equivalent to the Cenvat credit on such inputs or capital goods is to be reversed. However, such credit can be taken again when they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered as dealer in terms of the provisions of CER; (iv) a first stage dealer or a second stage dealer, in terms of the provisions of Central Excise Rules, 2002; (b) a supplementary invoice, issued by a manufacturer or importer in terms of the provisions of CER, in case additional amount of Excise duties or Additional duty of Customs has been paid; (c) A bill of entry; (d) A certificate issued by an Appraiser of Customs in respect of goods imported through a Foreign Post Office; (e) a Challan evidencing payment of Service Tax; (f) Invoice/bill/Challan issued by a provider of input service; (g) Invoice/bill/challan issued by an input service distributor on or after 10-9-2004. 15. Maintenance of Records (Rule 9 of the CCR): The manufacturer/Output service provider/Input service distributor shall maintain proper records for receipt, consumption and inventory of inputs and capital goods recording value, duty paid, and the person from whom inputs or capital goods purchased. The manufacturer shall submit a monthly return (Quarterly Return by SSI Units) in terms of Rule 9 (7) of the CCR. 16. Burden of proof for admissibility of Cenvat credit (Rule 9(5) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een taken or utilized wrongly by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of any of the provisions of the Finance Act, 1994 or the rules made thereunder with intent to evade payment of Service Tax, then the provider of output service shall be liable to pay penalty in terms of the provisions of Section 78 of the Finance Act, 1994. 20. Important points relating to Cenvat Credit: (a) The Cenvat Credit Rules 2004, is intended for the manufacturers governed by the Central Excise Act, 1944 as well as the service providers governed by the Finance Act, 1994 . The statutory provisions are mostly similar for both the categories; The main focus in this Guide is with reference to the statuatory provisions relating to the Central Excise law intended for the manfacturers. (b) Cenvat credit can be availed only when all the particulars as prescribed under the CER or Service Tax Rules, 1994 are contained in the said documents. (c) The jurisdictional Asst. / Deputy Commissioner is empowered to condone technical lapses or procedural infringements on the part of the assessee for availment of Cenvat credit so long as the duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EMBER (i) Payment of Central Excise Duty under Rule 8 of the CER: Due Date Obligation Category of Assessee 5th of every month except March Payment of Excise Duty as well as the amount payable in terms of the CCR (for the clearances effected during the previous month). All assesses (other than SSI units). For March-By 31st of March 15th of every month except March Payment of Excise Duty as well as the amount payable in terms of the CCR (for the clearances effected during the previous month). Assessees availing exemption based on the value of clearance (SSI units). 31st of March (For March) = Single Copy of GAR-7 Challan is to be used for payment of duty. = For E-payment, the due dates are 6th and 16th, instead of 5th and 15 th respectively. (ii) Filing of Returns: Due Date Obligation Category of Assessee 10th of the ER -1 Return (monthly return in month duplicate) furnishing the particulars of production removal of goods and particulars of Cenvat credit for the previous month - Rule 12 of the CER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 registration by specified persons; (iv) Evasion of duty payment; (v) Removal of excisable goods in violation of Central Excise Act or Rules made thereunder; (vi) Possession, transport, deposit, keeping, concealment, sales and purchase of goods liable to confiscation; (vii) Contravention of provisions relating to Cenvat credit; (viii) Failure to give required information or supply of false information; (ix) attempt to commit, or abet the commission of any of the offences mentioned above; (a) If duty involved exceeds Rs.1 lakh: upto 7 years Fine Imprisonment for a minimum period of 6 months. Imprisonment for lesser period is permissible, if the Court records special and adequate reasons for such reduction. (b) If duty involved is less than Rs.1 lakh: Imprisonment upto 3 years or fine or both. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 for more than 30 days Consignment wise payment of duty without utilization of the Cenvat credit till payment of dues with interest. Rule 25 Removal of goods in contravention of Central Excise Rules/ Notifications issued thereunder; Non- accountal of excisable goods; Manufacture without applying for Registration Certificate; Contravention of any provision under Central Excise Rules/ Notifications issued thereunder such rules. Confiscation of goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 registration? Yes. Subject to specified conditions, the following categories of persons need not obtain Central Excise registration. (i) Manufacturers of goods which are chargeable to nil rate of duty or are fully exempt; (ii) SSI manufacturers having annual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 15 th of the succeeding month (16 th 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 the month in question. The assessee is required to deposit the amount of duty payable in the nominated bank along with the prescribed GAR-7 Challan and on this amount being credited in the government account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral 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? The 100% EOU is required to file monthly return in the prescribed form. 20. Is it permissible for 100% EOU to sell the goods in local market? Yes. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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