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Procedure regarding valuation of goods assessable ad-valorem, determination of normal production, assessee to determine the duty due on the goods and to remove them on payment thereof.


173A. Application
173B. Assessee to file declaration of goods produced or manufactured in the factory
173C. Procedure regarding valuation of goods assessable ad valorem
173CC. Omitted
173D. Omitted
173E. Determination of normal production
173F. Assessee to determine the duty due on the goods and to remove them on payment thereof
173FF. Omitted
173G. Procedure to be followed by the assessee
173GG. Omitted
173H. Retention in, or bringing into, a factory or warehouse, of duty paid goods
173-I. Scrutiny by the proper officer
173J. and 173K. [Omitted]
173L. Refund of duty on goods returned to factory
173M. Goods cleared for export to be returned to the factory
173MM. Procedure in respect of exported goods subsequently re-imported and returned to the factory
173N. Procedure in respect of warehoused goods
1730. [Omitted]
173P. Remission of duty on goods used for special industrial purposes
173PP. [Omitted]
173PPP. [Omitted]
173Q. Confiscation and penalty

CHAPTER VII-A

REMOVAL OF EXCISABLE GOODS ON DETERMINATION OF DUTY BY PRODUCERS,
MANUFACTURERS OR PRIVATE WAREHOUSE LICENSEES

173A. Application.-

  1. Except as hereinafter provided, the provisions of this Chapter shall apply to such excisable goods as the Central Government may, by notification in the Official Gazette, specify in this behalf, and where there is a conflict between the provisions of this Chapter and the provisions contained in any other Chapter, in relation to such excisable goods, the provisions of this Chapter shall prevail:
    Provided that from amongst the excisable goods as are specified under this sub-rule, the Central Government may, by notification in the Official Gazette, declare certain excisable goods as declared excisable goods and the provisions of this Chapter shall, subject to such modifications as are indicated in relation to such declared goods in any rule under this Chapter, apply.
    Explanation.—The expression 'declared excisable goods', wherever it occurs, in this Chapter means the goods declared under this proviso.
  2. Nothing in this Chapter shall apply to a manufacturer or producer who has been allowed to discharge his duty liability in accordance with the provisions contained in section C-1, E-III, E-VI or E-IX of Chapter V or to whom the provisions of Chapter V-A apply.

173B. Assessee to file declaration of goods produced or manufactured in the factory.-

  1.  Every assesses, shall file with the Superintendent of Central Excise, having jurisdiction over the factory, a declaration (in quadruplicate) showing,—
    1. the full description of—
      1. all excisable goods produced or manufactured by him,
      2. all other goods produced or manufactured by him and intended to be removed from his factory, and
      3. all the excisable goods already deposited or likely to be deposited from time to time without payment of duty in his warehouse;
    2. the Chapter, heading No. and sub-heading No., if any, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) under which each goods fall;
    3. the rate of duty leviable on each such goods;
    4. the exemption notification availed or proposed to be availed, if any; and
    5. such other particulars as the Commissioner may direct, and obtain a dated acknowledgement of the said declaration:
      Provided that such declaration shall be filed on or before the 15th May, 1995 or such extended period as the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise may permit:
      Provided further that an assessee producing or manufacturing excisable goods for the first time shall be required to submit the said declaration within thirty days of commencing the production of such excisable goods.
  2. If in the declaration so filed under sub-rule (1), any alteration becomes necessary in respect of any goods because of—
    1. the assessee commencing production, manufacture or warehousing of goods not mentioned in that declaration, or
    2. the assessee intending to remove from his factory any non-excisable goods not mentioned in that declaration, or
    3. a change in the rate or rates of duty in respect of the goods mentioned in that declaration or, by reason of any amendment to the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), a change in the Chapter, heading No. or sub-heading No. the assessee shall likewise file a fresh declaration or an amendment of the declaration already filed within thirty days of any alteration mentioned above, in the same manner as is provided in sub-rule (1).
  3. The proper officer, duly empowered by the Central Government under section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration filed under sub-rule (1) by an assessee,—
    1. require any person to produce or deliver any document or thing relevant to the enquiry; and
    2. examine any person acquainted with the facts and circumstances of the particulars given in the declaration or other records, in the manner provided in section 14 of the Act.
  4. The proper officer may after such further enquiry as he may consider necessary, reassess the correct amount of duty payable following the provisions of section 11A of the Act and the assessee shall pay the deficiency, if any.

173C. Procedure regarding valuation of goods assessable ad valorem.-

  1. Every assessee who produces, manufactures or warehouses goods which are chargeable with duty at a rate dependent on the value of the goods and removes or clears such goods as provided in rules 9, 49, 144, 152 and 157, shall declare the value under section 4 of the Act of such goods in the documents such as sales invoice, invoice-cum-challan or like documents used by him for sale or removal of goods
    Provided that—
    1. such documents shall indicate separately the value of goods under section 4 of the Act and the duty paid as provided under section 12A of the Act;
    2. that such documents also contain a declaration of the price;
    3. that such documents also indicate, wherever applicable, individually the central excise duty, other taxes, all discounts and other consideration if any, for the difference between the price and the value of the goods under section 4 of the Act;
    4. that such documents also indicate the date and time of removal of the goods:
    Provided further that where an assessee,—
    1.  sells goods to or through related persons as defined in section 4 of the Act; or
    2. uses such goods for manufacture or production of other goods in his factory; or
    3. removes such goods for free distribution; or
    4. removes such goods in any other manner which does not involve sale; or
    5.  removes goods of the same kind and quality from his factories located in the jurisdiction of different Commissioners of Central Excise or Assistant Commissioners of Central Excise or Deputy Commissioner of Central Excise
      he shall file, with the proper officer a declaration, in such form and in such manner and at such interval as the Central Board of Excise and Customs or Commissioner of Central Excise may require, declaring the value of the goods under section 4 of the Act, the duty and other elements constituting the price of such goods along with such other particulars as the Central Board of Excise and Customs or the Commissioner of Central Excise may specify.
  2. The assessee shall certify in each such document that the amount indicated in such document represents the price actually charged by him and that there is no additional consideration flowing directly or indirectly from such sales over and above what has been declared.

    (2A) Every assessee who produces, manufactures or warehouses goods notified under Section 4A of the Act shall file with the proper officer a declaration in such form and in such manner and at such interval as the Central Board of Excise and Customs may specify, declaring the retail sale price of such goods, amount of abatement, if any on such sale price and such other particulars as may be specified by the said Board.
  3. The proper officer, duly empowered by the Central Government under section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration made in the documents referred to in sub-rule (1) or sub-rule (2A) by an assessee,—
    1. require any person to produce or deliver any document or thing relevant to the enquiry ; and
    2. examine any person acquainted with the facts and circumstances of the particulars declared in such documents or other records, in the manner provided in section 14 of the Act.

    (3A) The assessee shall declare to the proper officer his marketing pattern, discount structure and such other particulars in such form and in such manner and at such intervals as the Central Board of Excise and Customs or Commissioner of Central Excise may require.
  4. The proper officer may after such further enquiry as he may consider, reassess following the provisions of section 11A of the Act
    and the assessee shall pay the deficiency, if any.

173CC. Omitted

173D.
Omitted

173E. Determination of normal production.-

  1. Any officer duly empowered by the Commissioner in this behalf may fix the quantum and period of time when the production in the assessee's factory was considered normal by such officer having regard to the installed capacity of the factory, raw material utilisation, labour employed, power consumed and such other relevant factors as he may deem appropriate. The normal quantum of production during a given time so determined by such officer shall form the norm. The assessee shall, if so required by the said officer, be called upon to explain any shortfall in production during any time, as compared to the norm. If the shortfall is not accounted for to the satisfaction of the said officer, he may assess the duty due thereon to the best of his judgment, after giving the assessee a reasonable opportunity of being heard.
  2. The officer empowered as aforesaid may revise the norm as determined by him at any time, if after such further inquiry as he may consider necessary, he has reason to believe that any factor affecting the production of factory, has undergone a material change:
    Provided that the norm as determined by the officer empowered as aforesaid shall not be revised to the disadvantage of the assessee unless such assessee has been given a reasonable opportunity of being heard.

173F. Assessee to determine the duty due on the goods and to remove them on payment thereof.- Where the assessee has complied with the provisions of rules 173B, 173D, and, where applicable, 173C, he shall himself assess the duty due on the excisable goods intended to be removed and shall not, except as otherwise expressly provided in these rules, remove such goods unless he has paid the duty so determined.

173FF. Omitted

173G. Procedure to be followed by the assessee. —

  1. (a) Every manufacturer, other than a manufacturer who is availing of the exemption under a notification based on the value of clearances in a financial year, shall discharge his duty liability in respect of clearances of excisable goods from the place or premises specified under rule 9 or from a store room or other place of storage approved by the Commissioner under rule 47 made :
    1. during the first fortnight of the month, by the twentieth day of that month;
    2. during the second fortnight of the month, other than the month of March, by the fifth day of the succeeding month, and
    3. during the second fortnight of March, by the 31st day of the said March
    (aa) Every manufacturer availing of the exemption under a notification based on the value of clearances in the financial year shall discharge his duty liability in respect of clearances made during a calendar month, by the 15th day of the succeeding month.

    Explanation - For removal of doubts, it is hereby clarified that the duty liability under clause (a) or clause (aa) shall be deemed to have been discharged only if the amount payable is credited to the account of the Central Government by the date specified.
    b. the manufacturer shall maintain an account current with the Commissioner and shall discharge his duty liability by debiting such account-current or by utilising CENVAT credit, in the following manner:
    1. the manufacturer shall assess the duty due on the excisable goods intended to be removed, for each consignment and shall enter the particulars of such consignments in daily stock account maintained under rule 53;
    2. the manufacturer shall indicate on each invoice, issued under rule 52A, the amount of duty payable.
    3. at the end of each fortnight, the manufacturer shall determine the total amount of excise duty payable on the excisable goods removed during the fortnight, and he shall discharge the total duty liability so payable by making debit entry in the account current or by utilising CENVAT credit, as the case may be
    c. The duty of excise shall be deemed to have been paid, for the purpose of these rules, on excisable goods removed in the manner prescribed in this sub-rule, and credit of such duty, as may be prescribed, under any rule, will be permissible.
    d. If the manufacturer fails to pay the amount of duty payable by the due date, he shall be liable to pay the outstanding amount along with interest at the rate of twenty four per cent. Per annum on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount.
    e. If the manufacturer defaults on account of any of the following reasons, namely:-
    1. i. full payment of any one installment is discharged beyond a period of thirty days from the date on which the installment was due in a financial year, or
    2. the due date on which full payment of installments are to be made is violated for the third time in a financial whether in succession or otherwise,
      then the manufacturer shall forfeit the facility to pay the dues in installments under this sub-rule for a period of two months, starting from the date of communication of an order passed by the proper officer in this regard or till such date on which all the dues are paid, whichever is later and during this period the manufacturer shall be required to pay excise duty for each consignment by debit to the account current referred to in clause (b) and in the event of any such failure it will be deemed as if such goods have been cleared without payment of duty and the consequences and penalties as provided in the Central Excise Rules shall follow."
    (1A) Where an assessee keeping an account-current under sub-rule (1) makes an application to the Commissioner for withdrawing an amount from such account-current, the Commissioner may, for reasons to be recorded in writing, permit such assessee to withdraw the amount in accordance with such procedure as the Commissioner may specify in this behalf.
  2. Notwithstanding the provisions of sub-rule (1) of rule 224 but subject to the other provisions of that rule and the provisions of rule 173FF, every assessee shall except as otherwise expressly provided in these rules, forthwith remove the goods on which duty has been determined and paid; every such removal shall take place under an invoice or invoices in accordance with the provisions of rule 52A but without the proper officer's counter-signature, and such invoice or invoices shall also show the rate and the amount of duty paid on such goods and the time of actual removal of the goods from the factory:
    Provided that—
    1. a single invoice may be issued at the end of the factory day to cover removal of goods consumed within the factory in a continuous process;
    2. the Commissioner may, having regard to the nature of the goods manufactured or frequency of removals permit an assessee or a class of assessees not to enter the rate and/or the amount of duty on the invoices under which such goods are removed from the factory;
    3. [Omitted]
    4. in respect of removal of any excisable goods between appointed time and 12.00 (midnight) on the appointed date, the provisions of sub-rule (1) of rule 224 shall apply;
    5. [Omitted]
    6. where any correction, other than one relating to the date or the time of removal of goods or to the description of the goods (including the variety of goods, the number and description of packages and the identification marks thereon), becomes necessary in any invoice before removal of the goods, such correction may be made by the assessee provided this is done neatly and over his dated signature in all copies of the invoice; and
    7. where the assessee, after he has debited the duty due on the goods in the account-current referred to in sub-rule (1), finds it necessary to cancel any invoice, he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day on which such invoice is cancelled, and may thereupon take credit of the duty in that account.
    (2A) Every assessee shall file with the proper officer the triplicate copies of the invoices or like documents issued,
    1. during first ten days of a month, on or before the twelfth day of the same month;
    2. during the next ten days of the month, on or before the twenty-second day of the same month; and
    3. during the remaining days of that month, on or before the fifth day of the following month,
      along with a covering list showing the serial number of such invoices as well as opening balance, credit, debit and closing balance in his account-current and in his account maintained in form R.G. 23A, Part II and form R.G. 23C Part II.
      Provided that an assessee availing of the exemption under a notification based on the value or quantity of clearances in a financial year, shall file with the proper officer the triplicate copies of the invoices or like documents issued during a quarter, on or before the fifth day of the following quarter along with a covering list showing the said number of such invoices as well as opening balance, credit, debit and closing balance in his account current and in his account maintained in Form RG 23A, Part II and Form RG 23C Part-11.
  3. Within ten days after the close of each month every assessee shall, in lieu of the returns prescribed under rule 54, file with the proper officer in quintuplicate a monthly return in the proper Form showing the quantity of excisable goods manufactured or received under bond during the month, the quantity (if any) used within the factory for the manufacture of another commodity, the quantity removed on payment of duty from the place or premises specified under rule 9 or from the store-room or other place of storage approved by the Commissioner under rule 47, duty paid on such quantity, particulars of invoices or like documents under which such quantity was removed, the quantity removed without payment of duty for export or otherwise and such other particulars as may be elsewhere prescribed or as the Commissioner may, by general or special order, require, and where so required by the Commissioner, by written notice, shall submit a similar return in the proper Form showing all the other products manufactured in and issued from the factory during the same month. Every such return in respect of excisable goods shall be accompanied by—
    1. [Omitted]
    2. receipted treasury challans on which deposits in the account-current were made by payment into the Government treasury; and
    3. original and duplicate copies of the account-current and also of the account in form R.G.23, and RG 23C, as the case may be, maintained by the assessee during the period covered by the return;
    4. any other document or documents as the Commissioner may require,
      and if there was no stock, production and removal of excisable goods during the said period the assessee shall file with the proper officer a nil return, unless otherwise directed by the Commissioner:
    Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals—
    1.  fix in relation to any assessee or class of assessees a period shorter than one month for filing the aforesaid return;
    2. permit that the aforesaid return may be filed by the assessee within a period not exceeding 21 days after the close of each month.
    1.  Every assessee shall maintain such accounts, as the Commissioner may from time to time require 'or permit, subject to such conditions as may be specified by him of the production, manufacture, storage, delivery or disposal of the goods, including the materials received for or consumed in the manufacture of excisable goods or other goods, the goods and materials in stock with him and duty determined and paid by him.
    2. Unless specially exempted by the Commissioner by order in writing, all books of accounts maintained under clause (a) shall be sent by him, before these are brought into use, for authentication by the proper officer in such manner and at such time as the Commissioner may direct.
    3. In respect of any assessee, or class of assessees, the Commissioner may direct that all books of accounts maintained under clause (a), subject to what has been stated in clause (b), shall be deemed to be the proper form for the respective purpose.
    1. Every assessee shall furnish to the proper officer, a list in duplicate, of all the records prepared or maintained by him for accounting of transactions in regard to receipt, purchase, manufacture, storage, sales or delivery of the goods including inputs and capital goods.
      Explanation. - For the purposes of this rule, -
      1. the expression 'records' shall include account, agreement, invoice, price-list, return, statement or any other source document, whether in writing or in any other form;
      2. the expression source documents means all documents which form the basis of accounting of transactions and include sales invoice, purchase invoice, journal voucher, delivery challan and debit or credit note.
    2. Where an assessee maintains or generates such records by using computer, such assessee shall submit the following information to the proper officer, namely: -
      1. documentation including policy and procedure manuals, instructions to record the flow and treatment of transactions through accounting system, from the stage of initiation to closure and storage;
      2. account of the audit trail and inter-linkages including the source document, whether paper or electronic, and the financial accounts; and
      3. record layout, data dictionary and explanation for codes used and total number of records in each field along with sample copies of documents.
        Whenever changes are made in the systems adopted by the assessee, he shall inform the proper officer and submit the relevant document.
    3. The assessee shall be responsible for keeping, maintaining, retaining, and safeguarding records.
    1. Every assessee shall, on demand make available to the Central Excise Officer or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, -
      1. the records maintained or prepared by him in terms of clause (a) of sub-rule (5);
      2. the cost audit reports, if any, under section 233B of the Companies Act, 1956; and
      3. the Income-tax audit report, if any, under section 44AB of Income-tax Act, 1961, for the scrutiny of the officer or audit party, as the case may be.
    2. Every assessee who is having more than one factory and maintains separate records in respect of every factory for the purpose of audit then, he shall produce the said records for audit purposes.
    3. Where the Commissioner or the Comptroller and Auditor General of India decide to undertake the audit of the records of any assessee, the said assessee shall be given notice thereof at least fifteen days before the commencement of such audit. The audit party deputed for the purpose shall also call for in writing the records, which are required to be produced by the assessee, either before or during the course of audit.
    4. Every assessee, who maintains or generates his records by using computer, shall provide the required records in the form of tapes or floppies or cartridges or compact disk or any other media in an electronically readable format as prescribed by the Commissioner at the time of audit. The copies of records, so furnished, shall be duly authenticated by the assessee.
    5. All records submitted to audit party in electronic format shall be used only for verification of payment of duties of excise or for verification of compliance of the provisions of the Central Excise Act, 1944 or the rules made thereunder and shall not be used for any other purpose without the written consent of the assessee.
  4. Notwithstanding the provisions of sub-rules (1) and (3), an assessee manufacturing excisable goods specified in this behalf by the Central Government by notification in the Official Gazette , whose duty liability in the preceding financial year did not exceed five hundred rupees or who being a new assessee does not expect to be liable to pay more than five hundred rupees as duty in the relevant financial year, may, after informing the proper officer in writing, pay duty in respect of each separate consignment at the time of removal instead of keeping an account-current with the Commissioner, and may also file the return prescribed in sub-rule (3) for a quarter within seven days after the close of every quarter instead of filing the monthly return.
  5. In respect of a manufacturer availing of the exemption under a notification based on the value or quantity of clearances in a financial year, the provisions of this rule shall have effect in that financial year as if for the word "month", wherever it occurs, the word "quarter", and for the word "monthly", wherever it occurs, the word "quarterly" were substituted.
  6. Every assessee shall preserve the records including book of accounts, and source documents and data in any electronic media, where any document is generated on computer, for five financial years immediately after the financial year to which the records pertain.
    Form:R.T.12

173GG. Omitted.

173H. Retention in, or bringing into, a factory or warehouse, of duty paid goods.-

  1. Except as hereinafter provided, no excisable goods or parts thereof on which duty has been paid shall be brought into, or retained in, a factory or a warehouse.
  2.  An assessee may, subject to such conditions as may be specified by the Commissioner, retain in, or bring into, his factory or warehouse, excisable goods or parts thereof, accompanied by duty paying documents, if such goods or parts thereof,—
    1. are required for use in the manufacture of other goods in the factory; or
    2. are required in the factory for construction, repairs or for use as fittings or equipment or for any other purpose for which such goods are normally consumed; or
    3. need to be re-made, refined, reconditioned, repaired or subjected to any similar process in the factory; or
    4. cannot be transported due to circumstances beyond the assessee's control, such as, the suspension of booking on railways, non-availability of railway wagons or the break-down of carriers; or
    5. are required for test or for study of designs or methods of construction:
    Provided that where such goods or parts thereof are required to be brought into the factory or warehouse of an assessee for any of the purposes specified in clause (c), such goods or parts thereof shall be brought into such factory or warehouse within a period of one year from the date of their initial removal from the factory or warehouse or within the period of warranty or guarantee provided in respect of such goods by the manufacturer thereof, whichever is more:

    Provided further that the Commissioner may, on a representation being made to him in this regard, if he is of opinion that having regard to the circumstances of the case, it is necessary so to do, by order extend the period specified in the first proviso to such period as he may consider necessary:

    Provided also that in the case of goods or parts thereof which are not accompanied by duty paying documents, if the Commissioner is satisfied that the identity of the goods can be established by other collateral evidence, he may by order and subject to such conditions as he may impose, relax the requirement of the production of duty paying documents.
  3. The Chief Commissioner may, by a general or special order, and subject to such conditions and limitations as may be specified in such order, permit any other duty paid goods or parts thereof not specified in sub-rule (2), to enter, or to be retained in, a factory or a warehouse.
  4. The goods or parts thereof retained in, or brought into, a factory or warehouse in accordance with the provisions of sub-rule (2) ' or sub-rule (3) may, if not subjected to any process amounting to manufacture, be removed from the factory or warehouse without payment of duty subject to such conditions as may be specified by the Commissioner or Chief Commissioner as the case may be.

173-I. Scrutiny by the proper officer.-

  1. The proper officer may on the basis of information contained in the return filed by the assessee under sub-rule (3) of rule 173G, and after such further enquiry as he may consider necessary, scrutinize the correctness of the duty assessed by the assessee on the goods removed.
  2. The proper officer may require the assessee to produce invoices and other documents for verification as and when required.
  3. If on scrutiny or otherwise, the proper officer is of the opinion that duty of excise leviable on any goods has not been levied or paid or has been short levied or short paid or duty has not been correctly, legally or properly self-assessed and paid by the assessee, he may require the assessee to produce any document or records in his possession considered relevant to the determination of the duty payable on the goods and may pass such order of assessment as he thinks fit provided that duty so assessed shall be recovered in accordance with the provisions of section 11A of the Act.
  4.  If on scrutiny by the proper officer or otherwise, he is of the opinion that the duty assessed by the assessee is paid in excess than what was payable, the said duty shall be refunded in accordance with section 11B of the Act.
  5. Interest on delayed payment shall be paid by the assessee at such rate as may be fixed by the Board in accordance with section 11AA. In addition, interest shall be paid, where duty is short levied or short paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act in accordance with provisions of section 11AB of the Act. Interest on refund shall be paid to the assessee in accordance with section 11BB and at such rate as may be fixed by the Board in terms of that section.

173J. and 173K. [Omitted]

173L. Refund of duty on goods returned to factory.

  1. The Commissioner may grant refund of the duty paid on manufactured excisable goods issued for home consumption from a factory, which are returned to the same or any other factory for being re-made, refined, reconditioned or subjected to any other similar process in the factory:
    Provided that—
    1. such goods are returned to the factory within one year of the date of payment of duty or within such further period or periods not exceeding one year, in the aggregate, as the Commissioner may, on sufficient cause being shown, permit in any particular case;
    2. the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause being shown, permit in any particular case,] to enable the proper officer to verify the particulars of such goods within forty-eight hours of receipt of the information;
    3. the assessee stores the said goods separately pending their being remade, refined, reconditioned or subjected to any other similar process in the factory unless otherwise permitted by the Commissioner by an order in writing and makes such goods available for inspection by the proper officer when so required;
    4. the amount of refund payable shall in no case be in excess of the duty payable on such goods after being re-made, refined re-conditioned or subjected to any other similar process in the factory:

      Provided further that in relation to the declared excisable goods, for clause (ii) of the first proviso, the following clause shall be substituted, namely:—
      (ii) the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause being shown, permit in any particular case.
  2. The assessee shall maintain a detailed account of the returned goods and the processes to which they are subjected, after their return to the factory in the proper form.
  3. No refund under sub-rule (1) shall be paid until the processes mentioned therein have been completed and an account under sub-rule (2) having been rendered to the satisfaction of the Commissioner within six months of the return of the goods to the factory. No refund shall be admissible in respect of the duty paid,—
    1. in respect of opened packages containing goods with concessional rates of duty or partial exemption for the small or cottage sector, as set forth in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), or by a notification issued under rule 8 or section 5A of the Act;
    2. if the amount of refund payable on the goods is less than rupees fifty;
    3. on goods which are disposed of in any manner other than for production of goods of the same class;
    4. on the unmanufactured tobacco from which cigars, cheroots and cigarettes so returned to the factory have been produced;.
    5. if the value of the goods at the time of their return to. the factory is, in the opinion of the Commissioner, less than the amount of duty originally paid upon them at the time of their clearance from the factory.
      Explanation.—In this clause, "value" means the market value of the excisable goods and not the ex-duty value thereof.
  4. The Commissioner may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund.
  5. The provisions of this rule shall not apply to excisable goods manufactured,—
    1. in a free trade zone and returned to a factory in any other place in India; or
    2. by a hundred per cent export-oriented undertaking and returned to another factory in any place in India.
      Form:D.3

173M. Goods cleared for export to be returned to the factory:-

  1. After intimating the Assistant Commissioner or Deputy Commissioner of Central Excise, the manufactured excisable goods cleared for export under claim for rebate or in bond, but not exported for any reasons may be returned to the same factory or any other factory for being re-made, refined, reconditioned, or subjected to other similar processes in the factory:
    Provided that—
    1. such goods are returned to the factory within one year of the date of payment of duty or within such further period or periods, not exceeding six months in the aggregate, as the Commissioner may, on sufficient cause being shown, permit in any particular case;
    2. the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause being shown, permit in any particular case, to enable the proper officer to verify the particulars of such goods within forty-eight hours of receipt of the information;
    3. such goods are stored separately pending being re-made, refined, reconditioned or subjected to other similar processes in the factory unless otherwise permitted by the Commissioner by an order in writing and are made available for inspection by the proper officer, if so required by him;
    4. a detailed account of the returned goods and the processes to which they are subjected after their return to the factory, is kept in the proper form:
      Provided further that in relation to the declared excisable goods, for clause (ii) of the first proviso, the following clause shall be substituted, namely:—
      "(ii) the assessee gives information of the re-entry of each consignment of such excisable goods into the factory to the proper officer in writing in the proper form within twenty-four hours of such re-entry or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause being shown, permit in any particular case."
    (1A) After intimating the Assistant Commissioner or Deputy Commissioner of Central Excise, the manufactured excisable goods cleared for export in bond, but not exported for any reasons, may be returned to the same factory for storage purposes:
    Provided that—
    1. the conditions specified under items (i) and (ii) of the proviso to sub-rule (1) are observed;
    2. such goods are stored separately and made available for inspection by the proper officer, if so required by him;
    3. a separate account of the returned goods is kept in the production account.
  2. No refund shall be paid until the processes mentioned in sub-rule (1) have been completed and an account under clause (iv) of that sub-rule has been rendered to the satisfaction of the Commissioner within six months of the return of the goods to the factory. No refund shall be admissible in respect of duty paid—
    1. if the amount of duty originally paid or covered by the bond is less than rupees fifty;
    2. if the value of goods at the time of their return to the factory is less than the amount of duty paid originally upon them or covered by the bond entered into by the owner under rule 13 at the time of their clearance from the factory;
      Explanation.—In this clause, "value" means the market value of the excisable goods and not the ex-duty value thereof.
    3. on goods which are disposed of in any manner other than for production of goods of the same class;
    4. on the un-manufactured tobacco from which cigars, cheroots and cigarettes, so returned to the factory, have been produced.
  3. The Central Government may, for reasons to be recorded in writing, relax the provisions of this rule for the purpose of admitting a claim for refund.
  4. The provisions of this rule shall not apply to excisable goods manufactured,—
    1. in a free trade zone and returned to a factory in any other place in India; or
    2. by a hundred per cent export-oriented undertaking and returned to another factory in any place in India.

173MM. Procedure in respect of exported goods subsequently re-imported and returned to the factory.- In relation to excisable goods covered by this Chapter the provisions of rule 97B shall apply subject to the following modification, namely:—
In rule 97B, for the proviso, the following proviso shall be substituted, namely:—
"Provided that any waste or refuse arising as a result of the said processes shall be destroyed after informing the proper officer in writing at least seven days in advance and after observing such conditions and procedure as may be prescribed by the Commissioner and thereupon the duty payable on such waste or refuse may be remitted by the proper officers."
Form:D.3

173N. Procedure in respect of warehoused goods.- In relation to such excisable goods as are covered by this Chapter and are notified under rule 139, the provisions of Chapter VII of these rules shall apply subject to the following modifications, namely:—

  1. For rule 141, the following rule shall be substituted, namely:—
    "141. Receipt of goods in warehouse. All goods brought for warehousing shall be weighed, measured or gauged and assessed to duty by the registered person himself prior to entry into the warehouse, and the quantity and description of goods, the marks and numbers of the packages, the number and date of the permit, gate pass or certificate and the amount of duty leviable thereon, shall be noted in the warehouse register by the registered person. All goods received into a warehouse shall be kept separate from other goods until such goods have been taken into account by the registered person as aforesaid. The registered person shall inform the proper officer in writing in the proper form regarding receipt of each consignment in the warehouse within twenty-four hours of its receipt or within such further period not exceeding ten days, as the Commissioner may, on sufficient cause shown, permit in any particular case.".
  2. For rules 143 and 144, the following rules shall be substituted, namely:—
    "143. Owner's power to deal with warehoused goods.- In accordance with such instructions as the Commissioner may, from time to time, issue in writing in this behalf and after informing the proper officer in writing at least twenty-four hours in advance any owner of goods lodged in a warehouse may sort, separate, pack and repack the goods and make such alterations therein as may be necessary for the preservation, sale or disposal thereof. After the goods have been so separated and repacked, any refuse or damaged goods remaining after such sorting, packing and repacking shall be stored separately. The owner shall inform the proper officer in writing the quantity of such refuse or damaged goods and the date on which he proposes to destroy them at least seven days in advance and may destroy or otherwise dispose of such refuse or damaged goods in the manner and in accordance with the conditions as may be prescribed by the Commissioner by a general or special order. Thereupon the proper officer may remit the duty on such refuse or damaged goods.
    144. Goods not to be taken out of warehouse except as provided by these rules.- No goods shall be removed from any warehouse except on payment of duty or, where so permitted by the Central Government by notification in this behalf, for removal to another warehouse or for export from India and accompanied by a gate pass under rule 52A and/or on written application prescribed in rule 158or in rule 173-O as the case may be."
  3. In rule 148, for the words "quantity or weight reported by the officer who has assessed the goods", the words "quantity or weight as recorded by the Registered person at the time of warehousing or re-warehousing" shall be substituted.
  4. For rule 149, the following rule shall be substituted, namely:—
    "149. Destruction of unusable material, waste and other refuse.- Every owner of the goods stored in a warehouse who wishes to claim immunity from duty in respect of any goods unfit for consumption or manufacture shall inform the proper officer in writing the quantity of such goods and the date on which he proposes to destroy them at least seven days in advance, and may destroy or otherwise dispose of such goods in the manner and in accordance with the conditions as may be prescribed by the Commissioner by a general or special order in writing, or shall show, if so required to the satisfaction of the proper officer that such goods are being applied to some purpose which renders them eligible for remission of duty.".
  5. [Omitted]
  6. For rules 156A, 156B and 157, the following rules shall be substituted, namely:—

"156A. Procedure in respect of excisable goods removed from one factory or a warehouse to another.-

  1. The consignor shall prepare an application for removal of goods from a factory or a warehouse to another warehouse in quadruplicate in the proper form, mentioning clearly such information as the Commissioner may by general or special order, require.
  2. The consignor shall also prepare a gate pass in the proper form in respect of the goods proposed to be removed from his factory or warehouse.
  3. The consignor shall send the original, duplicate and triplicate application and original gate pass along with the consignment to the warehouse of destination.
  4. The consignor shall send quadruplicate application along with a copy of the gate pass to the Officer-in-charge of his factory or warehouse within twenty-four hours of the removal of the consignment.
  5. On arrival of the goods at the warehouse of destination, the consignee shall, within twenty-four hours of the arrival of goods, verify the same with all the three copies of the application. The consignee shall send the original application to the Officer-in-charge of his warehouse, duplicate to the consignor and retain the triplicate for his record.
  6.  The Officer-in-charge of the warehouse of destination shall countersign the application received by him and send it to the Officer-in-charge of the factory or warehouse of removal.
  7. The consignor shall retain the duplicate application duly endorsed by the consignee for his record.

156B. Failure to receive re-warehousing certificate.-

  1. In case the certificate of re-warehousing is not received back by the consignor within ninety days of the removal of the goods or such extended period as the Commissioner may allow to an assessee or class of assessees, the consignor shall pay the duty leviable on the consignment by a debit in his account-current:
    Provided that where such duty has been paid and proof of re-warehousing is produced by the consignor to the satisfaction of the proper officer, such consignor shall, on making an application to the proper officer, be entitled to a refund of the duty so paid.
  2. If the original application endorsed with the re-warehousing certificate is not received by the Officer-in-charge of the factory or warehouse of removal or if received, it shows a shortage not explained to the satisfaction of the proper officer, the consignor shall, on demand by the proper officer, pay the duty leviable on such goods within ten days of the notice of demand and if the duty is not so paid, he shall not be permitted to make fresh removals of any warehoused goods from his factory or warehouse to another warehouse until the duty is paid or until the certificate of re-warehousing is presented to the Officer-in-charge of the factory or warehouse of removal to his satisfaction.

157. Clearance of goods for home consumption.- Any owner of goods warehoused may, at any time within the period during which such goods can be left or are permitted to remain in a warehouse under rule 145, clear the goods for home consumption by paying—

  1. the duty thereon assessed prior to entry or reassessed under rule 159, and
  2. all rent, penalties, interest and other charges payable in respect of such goods.
    The goods shall then be assessed and cleared in the manner described in rule 173F read with rule 173G.".

(7) For rule 162, the following rule shall be substituted, namely:—
"162. Noting removal of goods.-

  1. When any goods are taken out of any warehouse, the owner of such goods shall note the fact in the warehouse register.
  2. Every note so made shall specify the quantity and description of the goods, the marks and numbers of the packages, the name of the person removing them, the number and date of application for clearance and/or of gate pass and the amount of duty paid, if any."

(8) After rule 162, the following rule shall be inserted, namely:—
"162A. Power to relax conditions.- The Central Board of Excise and Customs may, by order in writing, relax any of the provisions of this Chapter in respect of excisable goods falling under Chapter 27 and the goods of the following description, namely, benzene, toluene and xylene, falling within Chapter 29 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).".
Form:D.3

1730. [Omitted]

173P. Remission of duty on goods used for special industrial purposes.-
In relation to the excisable goods covered by this Chapter, the provisions of Chapter X of these rules shall apply subject to the following modifications, namely:—

  1. For rule 195, the following rule shall be substituted, namely:—
    "195. Disposal of refuse of excisable goods.- All refuse of excisable goods obtained under rule 192, which may remain after the completion of the industrial process shall be stored separately and the manufacturer shall inform the proper officer in writing the quantity of such refuse and the date on which he proposes to destroy them at least seven days in advance and may destroy or otherwise dispose of such refuse in the manner and in accordance with the conditions as may be prescribed by the Commissioner by a general or special order."
  2. For rule 196A, the following rule shall be substituted, namely:—
    "196A. Surplus excisable goods.- If any excisable goods obtained under rule 192 become surplus to the needs of the applicant for any reason, the applicant may, after informing the proper officer in writing at least 24 hours in advance:
    1. clear the goods on payment of duty, the rate of duty and the tariff valuation, if any, applicable to such goods being the rate and valuation, if any, in force on the date of actual removal of the goods from the applicant's premises; or
    2.  return the goods to the original manufacturer of the goods from whom the applicant had obtained them under bond and every such returned goods shall be added to the non-duty paid stock of the original manufacturer and dealt with accordingly. The applicant shall be accountable for the loss or deficiency, if any, during transport of the goods from the applicant's premises to the place of the original manufacturer; or
    3. clear the goods for export in the manner provided in rule 12 or 13 or 14, as the case may be."
    (2A) For rule 196AA, the following rule shall be substituted, namely:—
    "196AA. Transfer of excisable goods.- The applicant may, after informing the proper officer in writing at least twenty-four hours in advance, despatch the excisable goods obtained under rule 192 to another manufacturer who is eligible to the concession in respect of such goods and to whom a registration Certificate has been granted under rule 192 for obtaining such goods."
  3. For rule 196B, the following rule shall be substituted, namely:—
    "196B. Disposal of defective or damaged excisable goods.- If any excisable goods obtained under rule 192 are on receipt found to be defective or damaged or unsuitable to the needs of the applicant for any reason, such goods shall be stored separately and the applicant may,—
    1. after informing the proper officer in writing at least 24 hours in advance,—
      1.  return such goods to the original manufacturer of the goods from whom the applicant had obtained them under bond within such period and subject to such conditions as may be prescribed by the Commissioner in this behalf, and every such returned goods shall be added to the non-duty paid stock of the original manufacturer and dealt with accordingly. The applicant shall be accountable for the loss or deficiency, if any, during transport of the goods from the applicant's premises to the place of the original manufacturer; or
      2. clear such goods on payment of duty, the rate of duty and the tariff valuation if any, applicable to such goods being the rate and valuation, if any, in force on the date of actual removal of such goods from the applicant's premises; or
    2. after informing the proper officer in writing at least seven days in advance the quantity of such goods and the date on which he proposes to destroy them and after observing such conditions as may be prescribed by the Commissioner by general or special order, destroy such goods where the duty payable thereon has been remitted."

173PP. [Omitted]

173PPP. [Omitted]

173Q. Confiscation and penalty.-

  1. Subject to the provisions contained in section 11AC of the Act and rule 57AH, if any manufacturer, producer, registered person of a warehouse or a registered dealer,—
    (a) removes any excisable goods in contravention of any of the provisions of these rules; or
    (b) does not account for any excisable goods manufactured, produced or stored by him; or
    (bb) takes credit of duty or money in respect of inputs or capital goods for being used in the manufacture of final products or capital goods for use in the factory of the manufacturer of final product, as the case may be, 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 invoice or any other document approved under these rules evidencing the payment of excise duty or the countervailing duty, as the case may be, accompanying thereof, or takes credit of duty or money which he knows or which he has reason to believe, is not permissible under these rules, or does not utilise the inputs or capital goods in the manner provided for in these rules, or utilises credit of duty or money in respect of inputs or capital goods in contravention of any of the provisions of these rules, or does not render proper and true account of the receipt and disposal of the said inputs or capital goods and the credit of duty or money taken thereon as required under these rules, or contravenes any of the provisions contained in Section AA or AAA of Chapter V of these rules; or
    (bbb) enters wilfully any wrong or incorrect particulars in the invoice issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of the duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of such goods which is not permissible under these rules; or
    (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or
    (d) contravenes any of the provisions of these rules with intent to evade payment of duty,
    then, all such goods shall be liable to confiscation and the manufacturer, producer, registered person of a warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (bb) or clause (c) or clause (d) has been committed, or ten thousand rupees, whichever is greater.
    then, all such goods shall be liable to confiscation and the manufacturer, producer, registered person of a warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (bb) or clause (c) or clause (d) has been committed, or ten thousand rupees, whichever is greater.

    Explanation.—For the purposes of clause (bb) of sub-rule (1), a person availing of credit of duty on inputs received by him shall be deemed to have taken "reasonable steps" if he satisfies himself about the identity and address of the manufacturer or supplier, as the case may be, issuing the invoice or any other document approved under these rules evidencing the payment of excise duty or the countervailing duty, as the case may be, either-
    1. from his personal knowledge; or
    2. on the strength of a certificate given by a person with whose handwriting or signature he is familiar; or
    3. on the strength of a certificate issued to the manufacturer or the supplier, as the case may be, by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his factory or the supplier has his place of business:

Provided that where the identity and address of the manufacturer or the supplier is satisfied on the strength of a certificate, the person availing of credit of duty shall retain such certificate for production before the proper officer on demand.



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What is New?

Date: 25-11-2014
Central Excise INSTRUCTION
Regarding procedure of service tax refund/exemption to SEZ

Date: 25-11-2014
RBI/2014-15/316 A.P. (DIR Series) Circular No. 41
Routing of funds raised abroad to India

Date: 21-11-2014
RBI/2014-15/309 A.P. (DIR Series) Circular No. 39
External Commercial Borrowings (ECB) Policy – Parking of ECB proceeds

Date: 21-11-2014
RBI/2014-15/310 A.P. (DIR Series) Circular No.40
Release of Foreign Exchange for Haj/ Umrah pilgrimage

Date: 21-11-2014
Customs Notification No. 32/ 2014
Seeks to exempt from customs duty goods required for the Intensified Malaria Control Project funded by GFATM.

Date: 21-11-2014
Customs Notification No. 44/2014-Customs (ADD)
Seeks to levy definitive anti-dumping duty on imports of diclofenac sodium, originating in or exported from People's Republic of China, for a period of five years.

Date: 21-11-2014
Customs Notification No. 45/2014-Customs (ADD)
Seeks to levy definitive anti-dumping duty on imports of Digital Versatile Discs-Recordable (DVD-R and DVD-RW), originating in or exported from People's Republic of China, Hong Kong and Chinese Taipei for a period of five years.

Date: 21-11-2014
Central Excise Notification No 23/2014
Seeks to exempt from excise duty goods required for the Intensified Malaria Control Project funded by GFATM.

Date: 20-11-2014
DGFT Public Notice No.75/(RE 2013)/2009-14
Modification of SION A-1475 and SIONs A-1839, A-1841 and A-1842.

Date: 20-11-2014
Customs Notification No 111/2014 (NT)
Rate of exchange of conversion of each of the foreign currency with effect from 21st November, 2014