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TMI BlogCENVAT Credit Rules, 2001. .(Superseded vide Notification No. 5/2002-C.E., (N.T.), dated 1-3-2002)X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) above; (iii) moulds and dies; (iv) refractories and refractory materials; (v) tubes and pipes and fittings thereof; (vi) pollution control equipment; and (vii) storage tank, used in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; (c) "exempted goods" means goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty; (d) "final products" means excisable goods manufactured or produced from inputs, except matches; (e) "first stage dealer" means a dealer who purchases the goods directly from,- (i) the manufacturer under the cover of an invoice issued in terms of the provisions of Central Excise (No. 2) Rules, 2001 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; or (ii) an importer or from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice; (f) "input" means a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, paid on any inputs or capital goods received in the factory on or after the first day of July, 2001, including the said duties paid on any inputs used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86- Central Excise, dated the 25 th March, 1986, published in the Gazette of India vide number GSR 547 (E), dated the 25 th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final products, on or after the first day of July, 2001. Explanation.- For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975 ( 51 of 1975) on goods falling under heading No. 98.01 of the First Schedule to the said Customs Tariff Act. (2) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ( 58 of 1957); iii. the National Calamity Contingent duty under section 136 of the Finance Act, 2001 ( 14 of 2001); and iv. the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), equivalent to the duty of excise specified under clauses (i), (ii) and (iii) above, shall be utilized only towards payment of duty of excise leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, or under the said Additional Duties of Excise (Goods of Special Importance) Act, or the National Calamity Contingent duty under the said section 136 of the Finance Act, 2001(14 of 2001) respectively, on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves if such inputs are removed as such or after being partially processed; (c) The CENVAT credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively of the First Schedule to the Tariff Act shall be allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received machinery on April 16, 2001 in his factory. CENVAT of two lakh rupees is paid on this machinery. The manufacturer can take credit upto a maximum of one lakh rupees in the financial year 2001-2002, and the balance in subsequent years. (3) The CENVAT credit in respect of the capital goods shall be allowed to a manufacturer even if the capital goods are acquired by him on lease, hire purchase or loan agreement, from a financing company. (4) The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer claims as depreciation under section 32 of the Income-tax Act, 1961( 43 of 1961). (5) (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning or any other purpose, and it is established from the records, challans or memos or any other document produced by the assessee taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer avails of CENVAT credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take CENVAT credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. (3) The manufacturer, opting not to maintain separate accounts shall follow either of the following conditions, as applicable to him, namely:- (a) if the exempted goods are- i. tyres of a kind used on animal drawn vehicles or handcarts and their tubes, falling within Chapter 40 of the First Schedule to the Tariff Act; ii. newsprint, in rolls or sheets, falling within heading No.48.01 of the said First Schedule; iii. final products falling within Chapters 50 to 63 of the said First Schedule, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in, or in relation to, the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise (No. 2) Rules, 2001; (iv) a first stage dealer or a second stage dealer, in terms of the provisions of Central Excise (No. 2) Rules, 2001; (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise (No. 2) Rules, 2001 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under section 3 of Customs Tariff Act, 1975 ( 51 of 1975) has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 (52 of 1962) or the rules made thereunder with intent to evade payment of duty; (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monthly return in the form annexed to these rules. Explanation .- In respect of a manufacturer availing of any exemption based on the value or quantity of clearances in a financial year, the provisions of this sub-rule shall have effect in that financial year as if for the expression "month", the expression "quarter" was substituted. 8. Transfer of CENVAT credit.- (1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory. (2) The transfer of the CENVAT credit under sub-rule (1) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred alongwith the factory to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer of final products declared in the said notification, but are contained in the said final products. 12. Recovery of CENVAT credit wrongly taken.- Where the CENVAT credit has been taken or utilized wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of sections 11A and 11AB of the Act shall apply mutatis mutandis for effecting such recoveries. 13. Confiscation and penalty .-(1) If any person, takes CENVAT credit in respect of inputs or capital goods, wrongly or without taking reasonable steps to ensure that appropriate duty on the said inputs or capital goods has been paid as indicated in the document accompanying the inputs or capital goods specified in rule 7, or contravenes any of the provisions of these rules in respect of any inputs or capital goods, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed, or ten thousand rupees, whichever is greater. (2) In a case, where the CENVAT credit has been taken or utilized wrongly on account of fraud, willful mis-statement, collus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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