TMI BlogObligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted servicesX X X X Extracts X X X X X X X X Extracts X X X X ..... s or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2 .- Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made there under. Explanation 3. For the purposes of this rule, exempted services as defined in clause (e) of rule 2 shall include an activity, which is not a service as defined in section 65B(44) of the Finance Act, 1994 50 [provided that such activity has used inputs or input services]. Explanation 4. Value of such an activity as specified above in Explanation 3, shall be the invoice/agreement/contract value and where such value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Finance Act, 1994 and the rules made thereunder.] 42 [(2) A manufacturer who exclusively manufactures exempted goods for their clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of removal; (b) exempted goods removed means the exempted goods manufactured and cleared upto the place of removal; (c) non-exempted services means the output services excluding exempted services. ] 44 [(3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services and description of such exempted goods removed and such exempted services provided; (iv) description of inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifty per cent. of the common credit; (v) remainder of the common credit shall be called eligible common credit and denoted as G, where,- G = C - D; Explanation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and provision of exempted services for the whole of financial year, out of the total credit denoted as T (Annual) taken during the whole of financial year in the following manner, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of output service, shall at the end of the financial year, take credit of amount equal to difference between the total of the amount of the aggregate of ineligible credit and ineligible common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per the provisions of clauses (d), (e) and (f) , the following particulars, namely :- (i) details of credit attributed towards eligible credit, ineligible credit, eligible common credit and ineligible common credit, month-wise, for the whole financial year, determined as per the provisions of clause (b); (ii) CENVAT credit annually attributed to eligible credit, ineligible credit, eligible common credit and ineligible common credit for the whole of financial year, determined as per the provisions of clause (c); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value determined under section 3, 4 or 4A of the Excise Act, read with rules made thereunder; (b) in the case of a taxable service, when the option available under sub-rules (7),(7A),(7B) or (7C) of rule 6 of the Service Tax Rules, 1994, has been availed, shall be the value on which the rate of service tax under section 66B of the Finance Act, read with an exemption notification, if any, relating to such rate, when applied for calculation of service tax results in the same amount of tax as calculated under the option availed; or (c) in case of trading, shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten per cent of the cost of goods sold, whichever is more. (d) in case of trading of securities, shall be the difference between the sale price and the purchase price of the securities traded or one per cent. of the purchase price of the securities traded, whichever is more. (e) shall not include the value of services by way of extending deposits, loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either- 6 [(i) cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorized operations; or] (ii) cleared to a hundred per cent. export-oriented undertaking; or (iii) cleared to a unit in an Electronic Hardware Technology Park or Software Technology Park; or (iv) 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 9 [(iva) supplied for the use of foreign diplomatic missions or consular missions or career consular offices or diplomatic agents in terms of the provisions of 28 [ 12/2012-Central Excise , dated the 17th March, 2012, number G.S.R. 163(E), dated the 17th March, 2012] or] (v) cleared for export under bond in terms of the provisions of the Central Excise Rules, 2002; or (vi) gold or silver falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such period, the service provider shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier in terms of sub rule (3) to the extent it relates to such payment, on the basis of documentary evidence of the payment so received. ] **************** Notes:- 1. In item (i), of clause (a) of sub rule (3) of for the words and figures heading No.22.04 , the word and figures heading 2207 has been substituted vide notification no. 7/2007 CE(NT) dated 21-2-2007 2. In item (v) of clause (a) of sub rule (3), for the words and figures newsprint, in rolls or sheets, falling within heading No. 48.01 , the words and figures newsprint, in rolls, sheets or reels, falling within Chapter 48 has been substituted vide notification no. 7/2007 CE(NT) dated 21-2-2007 3. After Explanation II, Explanation III has been inserted with effect from the 1st day of April, 2007, namely:-vide Notification No. 10/2007 CE (NT) dated 1/3/2007) 4. in sub-rule (1) for the words, exempted goods or exempted servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2711 12 00, 2711 13 00 and 2711 19 00 of the said First Schedule[A4] ; (ix) Kerosene falling within heading 2710 of the said First Schedule, for ultimate sale through public distribution system. (b) if the exempted goods are other than those described in condition (a), the manufacturer shall pay an amount equal to ten 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; (c) the provider of output service shall utilize credit only to extent of an amount not exceeding twenty per cent. of the amount of service tax payable on taxable output service. Explanation I.- The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer or provider of output service by debiting the CENVAT credit or otherwise. Explanation II.- If the manufacturer or provider of output service fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 14, for recovery of CENVAT credit wrongly taken. (d) notwithstanding anything contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 30th June of the succeeding financial year, where the amount determined as per item (c) is more than the amount paid; (e) in addition to the amount short-paid, be liable to pay interest at the rate of twenty-four per cent. per annum from the due date i.e. 30th June till the date of payment, where the amount short-paid is not paid within the said due date; (f) where the amount determined as per item (c) is less than the amount determined and paid as per item (a), adjust the excess amount on his own, by taking credit of such amount; (iv) the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of such payment or adjustment, the following particulars, namely:- (a) details of CENVAT credit attributable to exempted services, monthwise, for the whole financial year, determined provisionally as per part (iii) item (a), (b) the amount equivalent to CENVAT credit attributable to exempted services, determined provisionally for each month and paid monthwise as per part (iii)item(b), (c) CENVAT credit attributable to exempted servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the said Customs Tariff Act when imported into India and supplied against International Competitive Bidding in terms of notification No. 6/2002-Central Excise dated the 1st March, 2002 or notification No. 6/2006-Central Excise dated the 1 st March, 2006, as the case may be. 9. Inserted, vide Notification No. 27/2010-Central Excise (N.T.), dated 01.07.2010 10 Substituted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. 11. Substituted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, input or input service which is used in the manufacture of [4] [exempted goods or for provision of exempted services], 12. Substituted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. Omitted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, Explanation I.- Value for the purpose of sub-rules (3) and (3A) shall have the same meaning assigned to it under section 67 of the Finance Act, 1994 read with rules made thereunder or, as the case may be, the value determined under section 4 or 4A of the Central Excise Act, 1944 read with rules made thereunder. Explanation II.- The amount mentioned in sub-rules (3) and (3A), unless specified otherwise, shall be paid by the manufacturer of goods or the provider of output service by debiting the CENVAT credit or otherwise on or before the 5 th day of the following month except for the month of March, when such payment shall be made on or before the 31 st day of the month of March. Explanation III.- If the manufacturer of goods or the provider of output service fails to pay the amount payable under sub-rule (3) or as the case may be sub-rule (3A), it shall be recovered, in the manner as provided in rule 14, for recovery of CENVAT credit wrongly taken. 19. Inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t March, 2006, number G.S.R. 96(E), dated the 1st March, 2006 29. Substituted vide Notification No. 25/2012-Central Excise (N.T), Dated 08/05/2012 , before it was read as:- notification No. 6/2006-Central Excise, dated the 1st March, 2006 . 30. Inserted vide Notification No. 25/2012-Central Excise (N.T), Dated 08/05/2012 31. Substituted vide Notification No.28/2012-Central Excise (N.T), Dated 20/06/2012 , before it was read as:- provider of taxable service 32. Inserted vide Notification No.28/2012-Central Excise (N.T), Dated 20/06/2012 , 33. Substituted vide Notification No.28/2012-Central Excise (N.T), Dated 20/06/2012 , before it was read as; in sub-rule (3A), in clauses (a), (b), (c) and (h), for the words taxable wherever they occur 34. Substituted vide Notification No.28/2012-Central Excise (N.T), Dated 20/06/2012 , before it was read as; providing taxable service specified in sub-clause (zm) of clause (105) of section 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exempted goods and their clearance upto the place of removal or for provision of exempted services] except in the circumstances mentioned in sub-rule (2). Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. 37 [ Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder.] 42. Substituted vide Not. 13/2016 - Dated 1-3-2016, w.e.f. 1st April, 2016, before it was read as, 12 [(2) Where a manufacturer or provider of output servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of sub-clauses (i) and (ii) of clause (b) and subclauses (i) and (ii) of clause (c) of sub-rule (3A) shall not apply for such payment: Provided that if any duty of excise is paid on the exempted goods, the same shall be reduced from the amount payable under clause (i): Provided further that if any part of the value of a taxable service has been exempted on the condition that no CENVAT credit of inputs and input services, used for providing such taxable service, shall be taken then the amount specified in clause (i) shall be 39 [seven] of the value so exempted. ; 32 [Provided that in case of transportation of goods or passengers by rail the amount required to be paid under clause (i) shall be an amount equal to 2 per cent. of value of the exempted services. ] Explanation I.- If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plus the total value of 33 [ output ] services provided plus the total value of exempted services provided, during the preceding financial year and D denotes total CENVAT credit taken on inputs during the month minus A; (iii) the amount attributable to input services used in or in relation to manufacture of exempted goods 16 [and their clearance up to the place of removal] or provision of exempted services (provisional) = (E/F) multiplied by G, where E denotes total value of exempted services provided plus the total value of exempted goods manufactured and removed during the preceding financial year, F denotes total value of taxable and exempted services provided, and total value of dutiable and exempted goods manufactured and removed, during the preceding financial year, and G denotes total CENVAT credit taken on input services during the month; (c) the manufacturer of goods or the provider of output service, shall determine finally the amount of CENVAT credit attributable to exempted goods and exempted services for the whole financial year in the following manner, namely:- (i) the amount of CEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; (g) the manufacturer of goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per condition (d) and (f) respectively, the following particulars, namely:- (i) details of CENVAT credit attributable to exempted goods and exempted services, monthwise, for the whole financial year, determined provisionally as per condition (b), (ii) CENVAT credit attributable to exempted goods and exempted services for the whole financial year, determined as per condition (c) (iii) amount short paid determined as per condition (d), alongwith the date of payment of the amount short-paid, (iv) interest payable and paid, if any, on the amount short-paid, determined as per condition (e), and (v) credit taken on account of excess payment, if any, determined as per condition (f); (h) where the amount equivalent to CENVAT credit attributable to exempted goods or exempted services cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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