GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 34/2016- Central Excise
(N.T.)
New Delhi, dated the 26th July, 2016
G.S.R. (E). – In exercise of the powers conferred by section 37 of the
Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the
following rules, namely:–
1. Short title, extent and commencement. – (1) These rules
may be called the Articles of Jewellery (Collection of Duty) Rules,
2016.
(2) They shall come into force on the date of their publication in the
Official Gazette.
2. Applications- These rules shall apply to the articles of
jewellery or parts of articles of jewellery or both, falling under Heading 7113
of the Central Excise Tariff Act, 1985 (5 of 1986).
3. Definitions. – In these rules, unless the context
otherwise requires, –
(a) “Act” means the Central Excise Act, 1944 (1 of 1944);
(b) “assessment” includes self-assessment of duty made by the assessee;
(c) “assessee” means a manufacturer or principal manufacturer, as the case
may be, of excisable goods;
(d) “Board” means the Central Board of Excise and Customs constituted under
the Central Board of Revenue Act, 1963 (54 of 1963);
(e) “duty” means the duty payable under section 3 of the Act;
(f) “articles” means articles of jewellery or parts of articles of jewellery
or both falling under Heading 7113 of the Tariff Act, wherein the expression
“articles of jewellery” shall have the meaning assigned to it as under chapter
note 9 of chapter 71 of the Tariff Act;
(g) “job work” means processing or working upon of raw materials or
semi-finished goods supplied to the job worker, so as to complete a part or
whole of the process resulting in the manufacture or finishing of articles of
jewellery or parts of articles of jewellery or both falling under heading 7113
of the First Schedule to the Central Excise Tariff Act;
(h) “job worker” means a person engaged in manufacture or processing on
behalf of a principal manufacturer, from any inputs or goods supplied by the
principal manufacturer, so as to complete a part or whole of the process
resulting ultimately in manufacture of articles.
(i) “principal manufacturer” means every person (not being an export-oriented
unit or a unit located in a Special Economic Zone or any person who gives his
pre-owned gold or any precious metal, ornaments or jewellery for the purpose of
being re-made or re-conditioned or gives precious stones for the purpose of
being mounted) who gets articles, produced or manufactured on his behalf, on
job-work basis and causes the sale of the articles for the first time.
(j) “silver studded articles” means articles of jewellery of silver studded
with diamond, ruby, emerald or sapphire falling under Heading 7113 of the Tariff
Act, wherein the expression “articles of jewellery” shall have the meaning
assigned to it as under chapter note 9 of chapter 71 of the Tariff Act;
(k) “Tariff Act” means the Central Excise Tariff Act, 1985 (5 of 1986);
(l) “traded articles” means articles, on which appropriate duty (including
nil duty) has already been paid at the time of their sale for the first time.
(m) words and expressions used herein but not defined in these rules and
defined in the Act shall have the meaning respectively assigned to them in the
Act.
4. Date for determination of duty. – (1) The rate of duty
applicable to the articles, shall be the rate in force on the date when such
articles are sold for the first time by the manufacturer or principal
manufacturer, as the case may be, from his registered premises or centrally
registered premises or branches of such centrally registered premises.
5. Assessment of duty. – The assessee shall himself assess
the duty payable on any excisable articles.
6. Manner of payment. – (1) The duty on the articles sold
for the first time by the manufacturer or principal manufacturer, as the case
may be, from his registered premises or centrally registered premises or
branches of such centrally registered premises, during a month, shall be paid by
the 6th day of the following month, if the duty is paid electronically through
internet banking or by the 5th day of the following month, in any other case :
Provided that in case of articles sold for the first time by
the manufacturer or principal manufacturer, as the case may be, during the month
of March, the duty shall be paid by the 31st day of March:
Provided further that where an assessee is eligible to avail
of the exemption under a notification based on the value of goods sold for the
first time in a financial year, the duty on articles sold for the first time
during a quarter of the financial year shall be paid by the 6th day of the month
following that quarter, if the duty is paid electronically through internet
banking and in any other case, by the 5th day of the month following that
quarter, except in case of articles sold for the first time during the last
quarter, starting from the 1st day of January and ending on the 31st day of
March, for which the duty shall be paid by the 31st day of March.
Explanation-1. – For the removal of doubts, it is
hereby clarified that, an assessee, engaged in the manufacture or production of
the articles shall be eligible, if his aggregate value of clearances of all
excisable goods for home consumption in the preceding financial year, computed
in the manner specified in the said notification, did not exceed rupees fifteen
crore.
Explanation-2. – The manner of payment as specified
in this proviso shall be available to the assessee for the whole of the
financial year.
Explanation-3. – For the purposes of this rule,-
(a) the duty liability shall be deemed to have
been discharged only if the amount payable is credited to the account of the
Central Government by the specified date;
(b) if the assessee deposits the duty by cheque,
the date of presentation of the cheque in the bank designated by the Central
Board of Excise and Customs for this purpose shall be deemed to be the date on
which the duty has been paid subject to realization of that cheque.
(2)_ Notwithstanding anything contained in sub-rule (1), the duty on the
articles sold for the first time from his registered premises or centrally
registered premises or branches of such centrally registered premises in the
months of March, April, May and June of 2016, by an assessee shall be paid by
the 31st of July, 2016.
Explanation. – For removal of doubts, it is hereby
clarified that the duty liability shall be deemed to have been discharged only
if the amount payable is credited to the account of the Central Government by
the specified date.
(3) Every assessee shall electronically pay duty through internet banking :
Provided that for reasons to be conveyed in writing to the
Assistant Commissioner or the Deputy Commissioner of Central Excise having
jurisdiction, an assessee may make payment of duty by any mode other than
internet banking.
(4) If the assessee fails to pay the amount of duty by due date, he shall be
liable to pay the outstanding amount along with interest at the rate specified
by the Central Government vide notification under section 11AA of the
Act 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.
(5) If the assessee fails to pay the duty declared as payable by him in the
return within a period of one month from the due date, then the assessee is
liable to pay the penalty at the rate of one per cent. on such amount of the
duty not paid, for each month or part thereof calculated from the due date, for
the period during which such failure continues.
Explanation. – For the purposes of this sub-rule,
‘month’ means the period between two consecutive due dates for payment of duty
specified under sub-rule (1) or the first proviso to sub-rule (1), as the case
may be.
(6) The provisions of section 11 of the Act shall be applicable for recovery
of the duty as assessed under rule 5 and mentioned in the return filed under the
Central Excise Rules, 2002, the interest under sub-rule (4) and penalty under
sub-rule (5) in the same manner as they are applicable for recovery of any duty
or other sums payable to the Central Government.
Explanation. – For the purposes of this rule, the
expressions ‘duty’ or ‘duty of excise’ shall also include the amount payable in
terms of the CENVAT Credit Rules, 2004.
7. Daily stock account. – (1) Every assessee shall maintain
separate records for receipt and sale of manufactured and traded articles,
indicating the particulars regarding description of the manufactured articles,
on a daily basis.
(2) All records and documents maintained by the assessee for manufactured
articles, including records showing receipts of articles manufactured or
received back from job worker’s premises, quantity of manufactured articles sold
for the first time from the registered premises or centrally registered premises
or branches of such centrally registered premises for home consumption, quantity
of manufactured articles sold for the first time from the registered premises or
centrally registered premises or branches of such centrally registered premises
for exports or any other records and documents, shall be preserved for a period
of five years immediately after the financial year to which such records
pertain.
(3) All records and documents maintained by the assessee for traded articles,
including records showing value of their traded stocks at the time of purchase
or any other records and documents, shall be preserved for a period of five
years immediately after the financial year to which such records pertain.
(4) All records of manufactured and traded articles maintained by the
assessee under this rule shall be maintained on weight and caratage basis.
(5) The assessee at his own option may preserve records under this rule in
electronic form with every page of the record so preserved authenticated by
means of a digital signature.
8. Articles to be removed on invoice. – (1) No excisable
articles shall be sold for the first time by the assessee from his registered
premises or the centrally registered premises or branches of such centrally
registered premises, except under an invoice (hereinafter referred to as the
“first sale invoice”).
(2) First sale invoice shall be duly signed by the assessee or his authorised
agent and shall be serially numbered. Such an invoice shall also contain the
registration number, name of the consignee, description of articles,
classification and date of removal by sale.
(3) First sale invoice shall show value of manufactured and traded articles
separately so as to arrive at the excise duty payable on the manufactured
articles.
(4) The invoice shall be prepared in duplicate and in the following manner,
namely:-
(i) the original copy being marked as ORIGINAL
FOR BUYER;
(ii) the duplicate copy being marked as DUPLICATE
FOR ASSESSEE;
(5) The rules relating to digitally signed invoice under the Central Excise
Rules, 2002 shall mutatis mutandis apply in relation to the digitally
signed invoice under these rules.
9. Job work in articles of jewellery or parts of articles of
jewellery. – (1) A principal manufacturer who gets articles
manufactured on his behalf, on job work basis shall obtain registration,
maintain accounts, pay duty leviable on such articles and comply with all the
relevant provisions of these rules, as if he is an assessee.
(2) First sale invoice shall be duly signed by the assessee or his authorised
agent and shall be serially numbered. Such an invoice shall also contain the
registration number, name of the consignee, description of articles,
classification and date of removal by sale.
(3) First sale invoice shall show value of manufactured and traded articles
separately so as to arrive at the excise duty payable on the manufactured
articles.
(4) The invoice shall be prepared in duplicate and in the following manner,
namely:-
(i) the original copy being marked as ORIGINAL
FOR BUYER;
(ii) the duplicate copy being marked as DUPLICATE
FOR ASSESSEE;
(5) The rules relating to digitally signed invoice under the Central Excise
Rules, 2002 shall mutatis mutandis apply in relation to the digitally signed
invoice under these rules.
Explanation. – For the removal of doubts, it is
hereby clarified that if any articles are lost, destroyed, found short at any
time before the sale for the first time of the articles, the principal
manufacturer shall be liable to pay duty thereon as if such articles were sold
for home consumption for the first time from the registered premises or
centrally registered premises or branches of such centrally registered premises,
at a value equal to cost of raw material plus job charges paid by the principal
manufacturer in case he had got such articles manufactured on job work basis. In
other cases, the value of such articles shall be the value of raw materials plus
the making charges charged by the manufacturer for similar articles.
10. Removal of inputs or semi-finished articles or finished articles
for certain purposes.-(1) A manufacturer or principal manufacturer, as
the case may, may remove any inputs or semi-finished articles or finished
articles for further processing, testing, repair, reconditioning, hallmarking,
display in exhibitions or for any other purpose including as samples, to some
other premises, without payment of duty, if such removal does not involve sale,
under a challan, issue voucher or any other document prepared by him for this
purpose, duly signed by the manufacturer or principal manufacturer, as the case
may be, or his authorised agent. Such challan or issue voucher or any other
document shall contain the following details:-
(a) name and registration number of the manufacturer or principal
manufacturer, as the case may be;
(b) description and quantity of articles;
(c) name of the person carrying the articles along with his signature and
proof of identity; and
(d) date of removal.
(2) The manufacturer or the principal manufacturer shall account for the
articles removed and returned in pursuance of sub-rule (1).
11. Receipt of duty paid articles for certain processes. –
(1) Where any articles on which duty had been paid at the time of their sale for
the first time by the assessee from his registered premises or the centrally
registered premises or branches of such centrally registered premises, are
brought back as such, the assessee shall state the particulars of such receipt
in his records as if they are traded articles and account for them in the
trading stock account, provided no refund of excise duty is claimed.
12. Optional scheme. – (1) Notwithstanding anything
contained in sub-rule (1) of rule (7) or sub-rule (3) of rule (8), the
manufacturer or principal manufacturer, as the case may be, dealing in both
manufactured and traded articles, may also pay excise duty on his first sale
value, by treating his first sales during a month solely as sale of manufactured
articles, if the quantity of such sales during the month is less than or equal
to the opening stock of manufactured articles at the start of such month, at his
own option, by giving a written declaration to the excise authorities having
jurisdiction by the 28th day of February of the previous financial year:
Provided that for the financial year 201 6-1 7, such written
declaration may be given to the Assistant Commissioner or Deputy Commissioner of
Central Excise, as the case may be, having jurisdiction, by the 31st day of
July, 2016:
Provided further that for the period beginning from 1st
March, 2016 to 31st March, 2016 such declaration may be given by the 31st day of
July, 2016:
(2) An option given under sub-rule (1) shall be valid for whole of the
financial year for which it is given by the manufacturer or the principal
manufacturer, as case may be.
(3) For availing the optional scheme under sub-rule (1) a manufacturer or
principal manufacturer, as the case may be, shall maintain,-
a) a record containing the stock details of
manufactured articles and traded articles separately for silver studded
articles; gold or platinum articles studded with diamonds; and other gold or
platinum articles, on weight or caratage basis; and
b) a record of the value of such traded articles
separately at their purchase prices.
(4) The opening stock, sales and closing stock of three types of articles,
referred to in sub-rule (3), shall be calculated separately for assessing the
excise duty payable during a month.
(5) The sales in excess of opening stock of manufactured articles, during a
month shall be deemed to be sale out of the opening stock of traded articles on
which no excise duty shall be payable.
(6) If the sales during a month are in excess of the sum total of the opening
stock of the manufactured articles and opening stock of traded articles, then
such excess sales shall first be deemed to be that of manufactured articles
received during that month and the balance, if any, shall be deemed to be that
of traded articles received during the month
(7) If the sales during a month are less than the opening stock of
manufactured articles, then the balance stock of manufactured articles shall be
carried forward and the opening stock of manufactured articles for the
succeeding month shall be the sum total of such carried forward stock of
manufactured articles and quantity of manufactured articles received from the
job worker’s premises or manufactured, during the month.
The following illustrates the above rules (all figures in kg):
Illustration 1. – A manufacturer or a principal manufacturer:
has an opening stock as on 1st April |
manufactured stock |
traded stock |
silver studded articles |
60 |
20 |
gold or platinum articles studded with diamonds |
30 |
20 |
other gold or platinum articles |
20 |
20 |
sells during the month of April |
total sales |
silver studded articles |
50 |
gold or platinum articles studded with diamonds |
20 |
other gold or platinum articles |
10 |
receives during the month of April |
manufactured stock |
traded stock |
silver studded articles |
60 |
10 |
gold or platinum articles studded with diamonds |
30 |
30 |
other gold or platinum articles |
20 |
40 |
As the sales during the month for the three types of articles are less than
the opening stocks of such manufactured articles, the same shall be deemed to be
that of manufactured articles only, as summarised below:
Quantity of articles deemed to be sold during the month of April |
of manufactured
articles |
of traded articles |
silver studded articles |
50 |
0 |
gold or platinum articles studded with diamonds |
20 |
0 |
other gold or platinum articles |
10 |
0 |
Total excise duty payable by such manufacturer or principal manufacturer for
the month of April shall be the sum total of the excise duty payable on 50 kg of
silver studded articles, 20 kg of gold or platinum articles studded with
diamonds and 10 kg of other gold or platinum articles.
After deducting the sales during the month of April, the closing stocks of
manufactured and traded articles as on 30th April, which shall also
be the opening stock as on 1st May, of three types of articles, with the
manufacturer or principal manufacturer shall be as under:
Closing stock as on 30th April / opening stock as on 1st May |
manufactured stock |
traded stock |
silver studded articles |
70 |
30 |
gold or platinum articles studded with diamonds |
40 |
50 |
other gold or platinum articles |
30 |
60 |
Illustration 2. – A manufacturer or a principal manufacturer:
has an opening stock as on 1st April |
manufactured stock |
Traded stock |
silver studded articles |
60 |
20 |
gold or platinum articles studded with diamonds |
30 |
20 |
other gold or platinum articles |
20 |
20 |
sells during the month of April |
total sales |
silver studded articles |
70 |
gold or platinum articles studded with diamonds |
40 |
other gold or platinum articles |
30 |
receives during the month of April |
manufactured stock |
traded stock |
silver studded articles |
60 |
10 |
gold or platinum articles studded with diamonds |
30 |
30 |
other gold or platinum articles |
20 |
40 |
As the sales during the month for the three types of articles are more than
the opening stocks of respective articles, the first sale equal to the opening
stock of each type of articles shall be deemed to be that of manufactured
articles of each type, as summarised below:
Quantity of articles deemed to be sold during the month of April |
of manufactured
articles |
of traded articles |
silver studded articles |
60 |
10 |
gold or platinum articles studded with diamonds |
30 |
10 |
other gold or platinum articles |
20 |
10 |
Total excise duty payable by such manufacturer or principal manufacturer for
the month of April shall be the sum total of the excise duty payable on 60 kg of
silver studded articles, 30 kg of gold or platinum articles studded with
diamonds and 20 kg of other gold or platinum articles.
After deducting the sales during the month of April, the closing stocks of
manufactured and traded articles as on 30th April, which shall also
be the opening stock as on 1st May, of three types of articles, with the
manufacturer or principal manufacturer shall be as under:
Closing stock as on 30th April / opening stock as on 1st May |
manufactured stock |
traded stock |
silver studded articles |
60 |
20 |
gold or platinum articles studded with diamonds |
30 |
40 |
other gold or platinum articles |
20 |
50 |
Illustration 3. – A manufacturer or a principal manufacturer:
gold or platinum articles studded with diamonds |
30 |
20 |
other gold or platinum articles |
20 |
20 |
sells during the month of April |
total sales |
silver studded articles |
70 |
gold or platinum articles studded with diamonds |
60 |
other gold or platinum articles |
30 |
receives during the month of April |
manufactured stock |
traded stock |
silver studded articles |
60 |
10 |
gold or platinum articles studded with diamonds |
30 |
30 |
other gold or platinum articles |
20 |
40 |
In this case, the sales during the month for the three types of articles are
more than the opening stocks of respective manufactured articles. Further, the
sales of in respect of ‘gold or platinum articles studded with diamonds’ are
even higher than the sum total of opening stocks of manufactured articles and
traded articles.
That being so, the first sales equal to the opening stock of ‘silver studded
articles’ and ‘other gold or platinum articles’ shall be deemed to be that of
manufactured ‘silver studded articles’ and ‘other gold or platinum articles’
respectively.
However, in respect of ‘gold or platinum articles studded with diamonds’, the
sales of 60 kg shall be first counted against that of opening stock of
manufactured articles [that is 30 kg], thereafter against the opening stock of
traded articles [that is 20 kg] and the balance [that is 10 kg] shall be counted
towards the manufactured articles received during the month, as summarised
below:
Quantity of articles deemed to be sold during the month of April |
of manufactured
articles |
of traded articles |
silver studded articles |
60 |
10 |
gold or platinum articles studded with diamonds |
40 |
20 |
other gold or platinum articles |
20 |
10 |
Total excise duty payable by such manufacturer or principal manufacturer for
the month of April shall be the sum total of the excise duty payable on 60 kg of
silver studded articles, 40 kg of gold or platinum articles studded with
diamonds and 20 kg of other gold or platinum articles.
After deducting the sales during the month of April, the closing stocks of
manufactured and traded articles as on 30th April, which shall also
be the opening stock as on 1st May, of three types of articles, with the
manufacturer or principal manufacturer shall be as under:
Closing stock as on 30th April / opening stock as on 1st May |
manufactured stock |
traded stock |
silver studded articles |
60 |
20 |
gold or platinum articles studded with diamonds |
20 |
30 |
other gold or platinum articles |
20 |
50 |
Explanation-1. – For the purposes of this option,
exports by a manufacturer or a principal manufacturer, as the case may be, shall
be counted towards the sale of manufactured articles during the month.
Explanation-2. – For the removal of doubts, it is
hereby clarified that in case of stock transfer between two branches of a
manufacturer or a principal manufacturer with centralised registration, as the
case may be, which do not involve sale, there shall be no liability to pay
excise duty at the stage of stock transfer, provided such stock transferred
manufactured articles or traded articles are added in corresponding stocks of
manufactured articles or traded articles of the recipient branch.
13. Stock of slow moving jewellery (“dead stock”). – (1) An
assessee maintaining separate stocks of manufactured and traded articles and
showing the value of such manufactured and traded articles separately in his
first sale invoice shall treat his dead stock as that of manufactured articles
or traded articles depending upon whether such dead stock is part of his stock
of manufactured articles or traded articles, as the case may be.
(2) For an assessee, who opts to pay the excise duty as per the optional
scheme under rule (12), if at the end of a particular return cycle, the
cumulative sales for three types of articles, namely ‘silver studded articles;
‘gold or platinum articles studded with diamonds’ or ‘other gold or platinum
articles’, as the case may be, on which duty has been paid or which have been
exported till the end of that return cycle are more than or equal to the
cumulative receipts of manufactured stock of such articles till the end of the
return cycle, then the whole of the dead stock of such articles would be deemed
to be that of traded articles, and new articles made out of such dead stock on
its receipt back by the manufacturer or principal manufacturer, as the case may
be, would form part of his traded stock of such articles.
(3) For an assessee who opts to pay the excise duty as per the optional
scheme under rule (12), the cumulative sales of a particular type of articles on
which duty has been paid or which have been exported till the end of a
particular return cycle are less than the cumulative receipts till the end of
that return cycle of such manufactured articles, then the dead stock of such
articles at the end of such return cycle, equal to the difference between the
cumulative receipts of manufactured stock and the cumulative sales till the end
of such return cycle shall be deemed to be that of manufactured articles, and
balance, if any, shall be considered as that of traded articles.
Illustration. – Thus, two alternative situations can be considered in
treatment of the dead stock at the end of the quarter:
Situation 1 – Cumulative sales at the end of return cycle are more than the
cumulative receipts of manufactured articles:
i. Cumulative receipts of manufactured silver
studded articles till the end of a quarter are 100 kg.
ii. Cumulative sales of manufactured silver
studded articles till the end of the quarter are 110 kg (out of which on 100 kg
the manufacturer or principal manufacturer, as the case may be, has paid excise
duty or which have been exported).
iii. Then, whole of the dead stock silver studded
articles at the end of such quarter shall be treated as that of traded stock and
new articles made out of such dead stock on its receipt back would form part of
traded stock.
Situation 2 – Cumulative sales at the end of return cycle are less than the
cumulative receipts of manufactured articles:
i. Cumulative receipts of manufactured silver
studded articles till the end of a quarter are 100 kg.
ii. Cumulative sales of manufactured silver
studded articles till the end of the quarter are 90 kg (out of which on 90 kg
the manufacturer or principal manufacturer, as the case may be, has paid excise
duty or which have been exported).
iii. Then, 10 kg [100 kg – 90 kg] of dead stock
of silver studded articles at the end of such quarter shall be treated as that
of manufactured stock and new articles made out of such dead stock on its
receipt back would form part of manufactured stock. Any dead stock of silver
studded articles at the end of such quarter in excess of 10 kg shall be deemed
to be that of traded stock.
14. Provisions to apply mutatis mutandis. – Except
as herein provided, all provisions of the Act and the Central Excise Rules,
2002, including those relating to registration, filing of returns, export
without payment of duty and recovery of dues shall apply mutatis mutandis.
[F. No. 354/25/2016 –TRU (Pt.-I)]
(Anurag Sehgal)
Under Secretary to the Government of India
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