Notification
No. 5 dated 1st March 2002 (NT) {As
amended by Central Excise Notification No. 39 dated 14th
November 2002 (NT), Notification No. 42 dated 23rd December 2002,
Notification No. 7 dated 13th February 2003, Notification No. 13
dated 1st March 2003 (NT)}
In exercise of the powers conferred by
section 37 of the Central Excise Act, 1944 (1 of 1944), and in supersession of
the CENVAT Credit Rules, 2001, except as respects things done or omitted to be
done before such supersession, the Central Government hereby makes the
following rules, namely: -
1.������� Short
title, extent and commencement:
(1)��������� These rules may be called the CENVAT
Credit Rules, 2002.
(2)��������� They extend to the whole of India.
(3)��������� They shall come into force on the 1st
day of March 2002.
2.������� Definitions:
���������� In
these rules, unless the context otherwise requires, -
(a)��������� �Act� means the Central Excise Act,
1944 (1 of 1944);
(b)��������� �capital goods� means, -
(i)��� all goods falling under Chapter 82, Chapter
84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of
the First Schedule to the Tariff Act;
(ii)������ pollution control equipment
(iii)������ components, spares and accessories of the
goods specified at (i) and (ii) above;
(iv)������ moulds and dies;
(v)������� refractories and refractory materials;
(vi)������ tubes and pipes and fittings thereof; 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)���������� �Customs Tariff Act� means the
Customs Tariff Act, 1975 (51 of 1975);
(d)����� �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;
(e)��������� �final products� means excisable goods
manufactured or produced from inputs, except matches;
(f)�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 Rules, 2002 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;
(g)��� �input� means all goods, except light diesel
oil, high speed diesel oil and motor spirit, commonly known as petrol, used in
or in relation to the manufacture of final products whether directly or
indirectly and whether contained in the final product or not, and includes
lubricating oils, greases, cutting oils, coolants, accessories of the final
products cleared along with the final product, goods used as paint, or as
packing material, or as fuel, or for generation of electricity or steam used
for manufacture of final products or for any other purpose, within the factory
of production.
Explanation 1:
The light diesel oil, high-speed diesel oil or motor spirit, commonly known as
petrol, shall not be treated as an input for any purpose whatsoever.
Explanation 2:
Inputs include goods used in the manufacture of capital goods, which are
further used in the factory of the manufacturer;
(h)��� �manufacturer� or �producer� in respect of
goods falling under Chapter 61 or 62 of the First Schedule to the Tariff Act
shall include a person who is liable to pay the duty of excise leviable on such
goods under sub-rule (3) of rule 4 of the Central Excise Rules, 2002;
(i)���� �notification� means the notification
published in the Official Gazette;
(j)���� �Tariff Act� means the Central Excise
Tariff Act, 1985 (5 of 1986);
(k)��� �second stage dealer� means a dealer who
purchases the goods from a first stage dealer;
(l)���� words and expressions used in these rules
and not defined but defined in the Act shall have the meanings respectively
assigned to them in the Act.
3.������� CENVAT
credit:
(1)��������� A manufacturer or producer of final
products shall be allowed to take credit (hereinafter referred to as the CENVAT
credit) of -
(i)������� the duty of excise specified in the
First Schedule to the Tariff Act, leviable under the Act;
(ii)������ the duty of excise specified in the
Second Schedule to the Tariff Act, leviable under the Act;
(iii)������ the additional duty of excise leviable
under section 3 of the Additional Duties of Excise (Textile and Textile
Articles) Act, 1978 ���������� (40 of
1978);
(iv)������ the additional duty of excise leviable
under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, ���������� 1957 (58 of
1957);
(v)������� the National Calamity Contingent duty leviable under section
136 of the Finance Act, 2001 (14 of 2001), as amended by clause 161 of the
Finance Bill, 2003, which clause has, by virtue of the declaration made in the
said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of
1931), the force of law; and
(vi)������ the additional duty leviable under
section 3 of the Customs Tariff Act, equivalent to the duty of excise specified
under clauses ���������� (i), (ii), (iii),
(iv) and (v) above,
paid on any
inputs or capital goods received in the factory on or after the first day of
March, 2002, 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 25th March, 1986, published vide number G.S.R. 547 (E),
dated the 25th 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 March, 2002.
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 on goods falling under heading 98.01 of the
First Schedule to the 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 the final products lying in stock on the date
on which any goods cease to be exempted goods or any goods become excisable.
(3)��� The CENVAT credit may be utilized for
payment of any duty of excise on any final products or for payment of duty on
inputs or capital goods themselves if such inputs are removed as such or after
being partially processed, or such capital goods are removed as such:
������� Provided that while paying duty, the CENVAT
credit shall be utilized only to the extent such credit is available on the
last day of the month for payment of duty relating to the month. (To substitute
the following proviso from 01-04-2003)
Provided
that while paying duty, the CENVAT credit shall be
utilised only to the extent such credit is available on the fifteenth day of a
month for payment of duty relating to the first fortnight of the month, and the
last day of a month for payment of duty relating to the second fortnight of the
month or in case of a manufacturer availing exemption by a notification based
on value of clearances in a financial year, for payment of duty relating to the
entire month.
Provided further that the
CENVAT credit of the duty paid on the inputs used in the manufacture of final
products cleared after availing of the exemption under the Notification Nos.
32/99-Central Excise, dated the 8th July 1999 [G.S.R. 508 (E) dated
the 8th July 1999] and 33/99-Central Excise dated the 8th
July 1999 [G.S.R. 509 (E) dated the 8th July 1999], shall be
utilized only for payment of duty on final products cleared after availing of
the exemption under the said Notification Nos. 32/99-Central Excise, dated the
8th July 1999 and 33/99-Central Excise, dated the 8th
July 1999;
Provided further that the
CENVAT credit of the duty paid on the inputs used in the manufacture of final
products cleared after availing of the exemption under the notifications number
39/ 2001-Central Excise, dated 31st July, 2001 [G.S.R. 565 (E) dated
the 31st July, 2001], 56/2002-Central Excise dated the 14th
November, 2002 [G.S.R. 764 (E) dated the 14th November, 2002], and
57/2002 - Central Excise dated the 14th November, 2002 [G.S.R. 765
(E) dated the 14th November, 2002], shall respectively be utilized
only for payment of duty on final products, in respect of which exemption under
the said notifications number 39/ 2001-Central Excise, dated the 31st
July, 2001, 56/2002-Central Excise dated the 14th November,
57/2002-Central Excise dated 14th November, 2002, is availed.
(4)��� When inputs or capital goods, on which CENVAT credit has
been taken, are removed as such from the factory, the manufacturer of the final
products shall pay an amount equal to the credit availed in respect of such
inputs or capital goods and such removal shall be made under the cover of an
invoice referred to in rule 7.
(5)��� The amount paid under sub-rule (4) shall be
eligible as CENVAT credit as if it was a duty paid by the person who removed
such goods under sub-rule (4).
(6)��� Notwithstanding anything contained in
sub-rule (1), -
(a)������ CENVAT credit in respect of inputs or
capital goods produced or manufactured, -
(i)� in a free trade zone or by a hundred per cent.
export-oriented undertaking or by a unit in an Electronic Hardware Technology
Park or Software Technology Park (other than a unit which pays excise duty
under section 3 of the Act read with notification No. 8/97- Central Excise,
dated the 1st March, 1997, number G.S.R 114 (E), dated the 1st
March, 1997 or No. 20/2002-Central Excise, dated the 1st March,
2002) and used in the manufacture of the final products in any other place in
India, in case the unit pays excise duty under section 3 of the Act read with notification
No. 2/95-Central Excise, dated the 4th January, 1995, number G.S.R.
189 (E), dated the 4th January, 1995, shall be admissible equivalent
to the amount calculated in the following manner, namely:-
Fifty per
cent. of [X multiplied by {(1+ BCD/100) multiplied by (CVD/100)}], where BCD
and CVD denote ad valorem rates, in per cent. of basic customs duty and
additional duty of customs leviable on the inputs or the capital goods
respectively and X denotes the assessable value.
(ii)in a Special Economic Zone, and used in the
manufacture of the final products in any other place in India, shall be
admissible equivalent to the amount calculated in the following manner, namely:
-
X multiplied
by {(1+ BCD/100) multiplied by (CVD/100)}, where BCD and CVD denote ad
valorem rates, in per cent. of basic customs duty and additional duty of
customs leviable on the inputs or the capital goods respectively and X denotes
the assessable value.
(b)������ CENVAT credit in respect of -
(i)���� the
additional duty of excise leviable under section 3 of the Additional Duties of
Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978);
(ii)��� the National Calamity Contingent duty
leviable under section 136 of the Finance Act, 2001 as amended by clause 161 of
the Finance Bill, 2003, which clause has, by virtue of the declaration made in
the said Finance Bill under the Provisional Collection of Taxes Act, 1931, the
force of law; and
(iii)
the
additional duty leviable under section 3 of the Customs Tariff Act, equivalent
to the duty of excise specified under clauses (i) and (ii) 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 the National Calamity Contingent duty leviable under section
136 of the Finance Act, 2001 as amended by clause 161 of the Finance Bill,
2003, which clause has, by virtue of the declaration made in the said Finance
Bill under the Provisional Collection of Taxes Act, 1931, the force of law,
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;
Explanation: For removal of doubts, it is
clarified that the credit of the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Goods of Special Importance) Act,
1957 (58 of 1957), may be utilised towards payment of duty of excise leviable
under the First Schedule or the Second Schedule of the Central Excise Tariff
Act, 1985 (5 of 1986);
(c)������ the
CENVAT credit, in respect of additional duty leviable under section 3 of the
Customs Tariff Act, 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 the extent of thirty rupees per square metre;
(d) ����� the CENVAT credit of the duty paid on the
inputs shall not be allowed in respect of texturised yarn (including
draw-twisted or draw-wound yarn) of polyesters falling under heading No. 54.02
of the First Schedule to the Tariff Act, manufactured by an independent
texturiser, that is to say, a manufacturer engaged in the manufacture of
texturised yarn (including draw-twisted or draw-wound yarn) of polyesters
falling under heading No. 54.02 of the said First Schedule, who does not have
the facility in his factory (including plant and machinery) for manufacture of
partially oriented yarn of polyesters falling under sub-heading No. 5402.42 of
the said First Schedule. (To be omitted from 01-04-2003 alongwith proviso)
Explanation. -
Where the provisions of any other rule or notification provide for grant of
partial or full exemption on condition of non-availability of credit of duty
paid on any input or capital goods, the provisions of such other rule or
notification shall prevail over the provisions of these rules.
4.���� Conditions for allowing CENVAT credit:
���������� (1)������ The CENVAT credit in respect of inputs
may be taken immediately on receipt of the inputs in the factory of the
manufacturer:
Provided
that in respect of final products falling under Chapter 61
or 62 of the First Schedule to the Tariff Act, the CENVAT credit of duty paid
on inputs may be taken immediately on receipt of such inputs in the registered
premises of the person who gets such final products manufactured on his account
on job work subject to the condition that such inputs are used in the
manufacture of such final products by the job worker.
(2)
(a)������ The CENVAT credit in respect of capital
goods received in a factory at any point of time in a given financial year shall
be taken only for an amount not exceeding fifty per cent. of the duty paid on
such capital goods in the same financial year:
Provided
that the CENVAT credit in respect of capital goods shall
be allowed for the whole amount of the duty paid on such capital goods in the
same financial year if the said capital goods are cleared as such in the same
financial year.
(b)������ The balance of CENVAT
credit may be taken in any financial year subsequent to the financial year in
which the capital goods were received in the factory of the manufacturer, if
the capital goods, other than components, spares and accessories, refractories
and refractory materials and goods falling under heading No. 68.02 and
sub-heading No. 6801.10 of the First Schedule to the Tariff Act, are in the
possession and use of the manufacturer of final products in such subsequent
years.
Illustration. -A
manufacturer received machinery on April 16, 2002 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 2002-2003, 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 sent to a job worker and if the inputs or the capital goods are
not received back within one hundred eighty days, the manufacturer shall pay an
amount equivalent to the CENVAT credit attributable to the inputs or capital
goods by debiting the CENVAT credit or otherwise, but the manufacturer can take
the CENVAT credit again when the inputs or capital goods are received back in
his factory.
(b)������ The CENVAT credit shall also be 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 specifications.
(6)��� The Commissioner of Central Excise having
jurisdiction over the factory of the manufacturer of the final products who has
sent the inputs or partially processed inputs outside his factory to a
job-worker may, by an order, which shall be valid for a financial year, in
respect of removal of such inputs or partially processed inputs, and subject to
such conditions as he may impose in the interest of revenue including the
manner in which duty, if leviable, is to be paid, allow final products to be
cleared from the premises of the job-worker.
5.������� Refund
of CENVAT credit:
Where any
inputs are used in the final products which are cleared for export under bond
or letter of undertaking, as the case may be, or used in the intermediate
products cleared for export, the CENVAT credit in respect of the inputs so used
shall be allowed to be utilized by the manufacturer towards payment of duty of
excise on any final products cleared for home consumption or for export on
payment of duty and where for any reason such adjustment is not possible, the
manufacturer shall be allowed refund of such amount subject to such safeguards,
conditions and limitations as may be specified by the Central Government by
notification:
Provided
that no refund of credit shall be allowed if the
manufacturer avails of drawback allowed under the Customs and Central Excise
Duties Drawback Rules, 1995, or claims a rebate of duty under the Central
Excise Rules, 2002, in respect of such duty.
6.������� Obligation
of manufacturer of dutiable and exempted goods:
(1)��� The CENVAT credit shall not be allowed on
such quantity of inputs, which is used in the manufacture of exempted goods,
except in the circumstances mentioned in sub-rule (2).
(2)��� Where a manufacturer 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)������� Goods falling within heading No. 22.04
of the First Schedule to the Tariff Act;
(ii)������ Low Sulphur Heavy
Stock (LSHS) falling within Chapter 27 of the said First Schedule used in the generation
of electricity;
(iii)������ Naphtha (RN) falling within Chapter 27 of
the said First Schedule used in the manufacture of fertilizer;
(iv)������ Omitted;
(v)������� Newsprint, in rolls or sheets, falling
within heading No.48.01 of the said First Schedule;
(vi)������ Final products falling within Chapters 50
to 63 of the said First Schedule,
(vii)����� Naptha (RN) and furnace oil falling
within Chapter 27 of the said First Schedule used for generation of electricity;
(viii)���� goods supplied to defence personnel
or for defence projects or to the Ministry of Defence for official purposes,
under any of the following notifications of the Government of India in the
erstwhile Ministry of Finance (Department of Revenue), namely: -
(1)��� No.
70/92-Central Excise, dated the 17th June, 1992, G.S.R. 595 (E), dated the 17th
June, 1992;
(2)
No.
62/95-Central Excise, dated the 16th March, 1995, G.S.R. 254 (E), dated the 16th
March, 1995;
(3)
No.
63/95-Central Excise, dated the 16th March, 1995, G.S.R. 255 (E), dated the 16th
March, 1995;
(4)
No.
64/95-Central Excise, dated the 16th March, 1995, G.S.R. 256 (E), dated the 16th
March, 1995,
the
manufacturer shall pay an amount equivalent to the CENVAT credit attributable to
inputs used in, or in relation to, the manufacture of such final products at
the time of their clearance from the factory; or
(b)������ if the exempted goods are other than
those described in condition (a), the manufacturer shall pay an amount equal to
eight ���������� per cent of the total
price, excluding sales tax and other taxes, if any, paid on such goods, of the
exempted final product ���������� charged
by the manufacturer for the sale of such goods at the time of their clearance
from the factory.
Explanation I:
The amount mentioned in conditions (a) and (b) shall be paid by the
manufacturer by debiting the CENVAT credit or otherwise.
�Explanation II:If the manufacturer fails to pay the said amount, it shall be
recovered along with interest in the same manner, as provided in rule 12, for
recovery of CENVAT credit wrongly taken.
(4)��� No CENVAT credit shall be allowed on capital
goods, which are used exclusively in the manufacture of exempted goods, other
than, the final products, which are exempt from the whole of the duty of excise
leviable thereon under any notification where exemption is granted, based upon
the value or quantity of clearances made in a financial year.
(5)��� The provisions of sub- rule (1), sub-rule
(2), sub-rule (3) and sub-rule (4) shall not be applicable in case the exempted
goods are either -
(i)������� cleared to a unit in a
free trade zone; or
(ii)������ cleared to a unit in a special economic zone; or
(iii)������ cleared to a hundred per cent.
export-oriented undertaking; or
(iv)������ cleared to a unit in an Electronic
Hardware Technology Park or Software Technology Park; or
(v)������� supplied to the United Nations or an
international organization for their official use or supplied to projects
funded by them, on which exemption of duty is available under notification of
the Government of India in the Ministry of Finance (Department of Revenue)
No.108/95-Central Excise, dated the 28th August, 1995, number G. S
R. 602 (E), dated the 28th August, 1995; or
(vi)������ cleared for export under bond in terms of
the provisions of the Central Excise Rules, 2002.
(vii)����� gold or silver falling within
Chapter 71 of the said First Schedule, arising in the course of manufacture of
copper or zinc by smelting.
6A.����� Storage of inputs outside the factory of the manufacturer:
The Assistant Commissioner of Central Excise or the Deputy
Commissioner of Central Excise having jurisdiction over the factory of a
manufacturer of the final products may, in exceptional circumstances having
regard to the nature of the goods and shortage of storage space at the premises
of such manufacturer, by an order, permit such manufacturer to store the inputs
in respect of which CENVAT credit has been taken, outside such factory, subject
to such limitations and conditions as he may specify:
Provided
that where such
inputs are not used in the manner prescribed in these rules for any reason
whatsoever, the manufacturer of the final products shall pay an amount equal to
the credit availed in respect of such inputs.
7.������� Documents and accounts:
(1)��������� The CENVAT credit shall be taken by
the manufacturer on the basis of any of the following documents, namely: -
(a)������ an invoice issued by-
(i)a manufacturer for clearance of -
(I)���� inputs or capital goods from his factory or
from his depot or from the premises of the consignment agent of the said
manufacturer or from any other premises from where the goods are sold by or on
behalf of the said manufacturer;
(II)������ inputs or capital goods as such;
(ii)���������� an importer;
(iii)��������� an importer from his depot or from the
premises of the consignment agent of the said importer if the said depot or �� ���������� the
premises, as the case may be, is registered in terms of the provisions of
Central Excise Rules, 2002;
(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 of inputs or capital goods in terms of the provisions
of Central Excise Rules, 2002 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 the Customs Tariff Act,
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 or the rules made thereunder with intent to
evade payment of duty.
Explanation.
- For removal of doubts, it is clarified that
supplementary invoice shall also include Challan or any other similar document
evidencing payment of additional amount of additional duty of customs leviable
under section 3 of the Customs Tariff Act;
(c)
a bill of entry;
(d)������ a certificate issued by an appraiser of
customs in respect of goods imported through a Foreign Post Office.
(1A)� CENVAT credit under rule 3 shall not
be denied on the grounds that any of the documents mentioned in sub-rule (1) does
not contain all the particulars required to be contained therein under these
rules, if such document contains details of payment of duty, description of the
goods, assessable value, name and address of the factory or warehouse:
Provided
that the Assistant
Commissioner of Central Excise or the Deputy Commissioner of Central Excise
having jurisdiction over the factory of a manufacturer intending to take CENVAT
credit is satisfied that duty due on the inputs has been paid and such inputs
have actually been used or are to be used in the manufacture of final products,
and such Assistant Commissioner of Central Excise or the Deputy Commissioner of
Central Excise shall record the reasons for not denying the credit in each
case.
(2)��� The
manufacturer or producer taking CENVAT credit on inputs or capital goods shall
take all reasonable steps to ensure that the inputs or capital goods in respect
of which he has taken the CENVAT credit are goods on which the appropriate duty
of excise as indicated in the documents accompanying the goods, has been paid.
Explanation. -The
manufacturer or producer taking CENVAT credit on inputs or capital goods
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 documents specified in rule 7, evidencing the payment
of excise duty or the additional duty of customs, as the case may be, either-
(a)������ from his personal knowledge; or
(b)������ on the strength of a certificate given by
a person with whose handwriting or signature he is familiar; or
(c)������ 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,
and where
the identity and address of the manufacturer or the supplier is satisfied on
the strength of a certificate, the manufacturer or producer taking CENVAT credit
shall retain such certificate for production before the Central Excise Officer
on demand.
(3)��� The CENVAT credit in respect of inputs or
capital goods purchased from a first stage or second stage dealer shall be
allowed only if such dealer has maintained records indicating the fact that the
inputs or capital goods were supplied from the stock on which duty was paid by
the producer of such inputs or capital goods and only an amount of such duty on
pro rata basis has been indicated in the invoice issued by him.
(4)��� The manufacturer of final products shall
maintain proper records for the receipt, disposal, consumption and inventory of
the inputs and capital goods in which the relevant information regarding the
value, duty paid, the person from whom the inputs or capital goods have been procured
is recorded and the burden of proof regarding the admissibility of the CENVAT
credit shall lie upon the manufacturer taking such credit.
(5)��� The manufacturer of final products shall
submit within ten days from the close of each month to the Superintendent of
Central Excise, a 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 Assistant Commissioner of Central
Excise or the Deputy Commissioner of Central Excise, as the case may be.
9.������� Transitional
provision:
(1)��� Any amount of credit earned by a
manufacturer under the CENVAT Credit Rules, 2001, as they existed prior to the
1st day of March, 2002 and remaining unutilised on that day shall be
allowable as CENVAT credit to such manufacturer under these rules, and be
allowed to be utilised in accordance with these rules.
(2)��� A manufacturer who opts for exemption from
the whole of the duty of excise leviable on goods manufactured by him under a
notification based on the value or quantity of clearances in a financial year,
and who has been taking CENVAT credit on inputs before such option is
exercised, shall be required to pay an amount equivalent to the CENVAT credit,
if any, allowed to him in respect of inputs lying in stock or in process or
contained in final products lying in stock on the date when such option is
exercised and after deducting the said amount from the balance, if any, lying
in his credit, the balance, if any, still remaining shall lapse and shall not
be allowed to be utilized for payment of duty on any excisable goods, whether
cleared for home consumption or for export.
10.�� Special
dispensation in respect of inputs manufactured in factories located in
specified areas of North East region, Kutch district of Gujarat and State of
Jammu and Kashmir:
Notwithstanding anything contained in these rules,
where a manufacturer has cleared any inputs or capital goods, in terms of
notifications of the Government of India in the erstwhile Ministry of Finance (Department
of Revenue) No. 32/99- Central Excise, dated the 8th July, 1999� [GSR 508(E), dated the 8th July,
1999] or notification No. 33/99- Central Excise, dated the 8th July,
1999 [GSR 509(E), dated the 8 th July, 1999] or notification No. 39/2001-Central
Excise, dated the 31st July, 2001 [GSR� 565(E), dated the 31st� July, 2001] or notification of the Government of India in the
Ministry of Finance and Company Affairs No.56/2002 Central Excise, dated the 14th
November, 2002 [GSR 764 (E), dated the 14th November 2002 ] or
notification No. 57/2002 Central Excise, dated 14th November, 2002
[GSR 765(E), dated the 14th November, 2002 ]� the CENVAT credit on such inputs or capital
goods shall be admissible as if no portion of the duty paid on such inputs or
capital goods was exempted under any of the said notifications.
11.������ Power
of Central Government to notify goods for deemed CENVAT credit:
Notwithstanding
anything contained in rule 3, the Central Government may, by notification
declare the inputs on which the duties of excise, or additional duty of customs
paid, shall be deemed to have been paid at such rate or equivalent to such
amount as may be specified in the said notification and allow CENVAT credit of
such duty deemed to have been paid in such manner and subject to such
conditions as may be specified in the said notification even if the declared
inputs are not used directly by the manufacturer 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, collusion
or suppression of facts, or contravention of any of the provisions of the Act
or the rules made thereunder with intention to evade payment of duty, then, the
manufacturer shall also be liable to pay penalty in terms of the provisions of
section 11AC of the Act.
(3)��� Any order under sub-rule (1) or sub-rule (2)
shall be issued by the Central Excise Officer following the principles of
natural justice.
14.������ Supplementary
provision:
Any notification,
circular, instruction, standing order, trade notice or other order issued under
the CENVAT Credit Rules, 2001 by the Board, the Chief Commissioner or the
Commissioner of Central Excise, and in force as on 28th February,
2002, shall, to the extent it is relevant and consistent with these rules, be
deemed to be valid and issued under the corresponding provisions of these
rules.