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TMI BlogCENVAT SCHEME Rules Notified Effective 1/4/2000X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Schedule to the Central Excise Tariff Act, 1985; (ii) components, spares and accessories of the goods specified at (i) above; (iii) moulds and dies; (iv) refractories and refractory materials; (v) tubes and pipes and fittings thereof, used in the factory; and (vi) pollution control equipment, used in the Factory of the manufacturing of the final products. Explanation.- For removal of doubts, it is hereby clarified that " capital goods: do not include any equipment or appliances used in an office. (b) "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 rate of duty; (c) "final products" means excisable goods manufactured or produced from inputs, except matches; (d) "Input" means all goods, except high speed diesel oil and motor sprit commonly known as petrol, used in or in relation, to manufactured of final products whether directly or indirectly and whether contained in the final product or not, and includes 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereon as if such inputs or capital goods have been manufactured in the said factory, and such removal shall be made under the cover of an invoice prescribed under rule 52A. (2) Notwithstanding anything contained in sub-rule (I)- (a) credit of duty in respect of input,; or capital goods produced or manufactured- (i) in a free trade zone and used in the manufacture of the final products in any other place in India; or (ii) by a hundred per cent export-oriented undertaking or by a unit in an Electronic Hardware Technology Park or Software Technology Parks and used in the manufacture of the final products in any place in India, shall be restricted to the extent which is equal to the additional duty leviable on like goods under section 3 of the Customs Tariff Act, 1975 paid on such inputs; (b) credit in respect of- (i) the additional duty of excise under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978); (ii) the additional duty of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and (iii) the additional duty under section 3 of the Customs Tariff Act, 1975, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2000-2001, the credit shall be taken for an amount not exceeding fifty per cent. of the duty paid on such capital goods. Illustration.- A manufacturer received machinery on April 16, 2000 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 2000- 2001, and the balance in subsequent years. (3) The CENVAT credit in respect of duty paid on the capital goods shall be allowed to a manufacturer even if the capital goods are acquired by the manufacturer 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 represent 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect 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. The manufacturer, opting not to maintain separate accounts shall follow either of the following condition$, as applicable to him, namely:- (a) if the exempted goods are,- (i) final products failing under Chapters 50 to 63 of the Schedule to the Central Excise Tariff Act, 1985; (ii) tyres of a kind used on animal drawn vehicles of handcarts and their tubes, failing within Chapter 40; (iii) black and white television sets, falling within Chapter 85. (iv) newsprint, in rolls or sheets, falling within Chapter heading No. 48.0 1, the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs used in or in relation to the manufacture of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice issued by an importer from his depot or from the premises of the consignment agent of the said importer provided the said depot or the premises, as the case may be, is registered under rule 174; (g) an invoice issued by a first stage or second stage dealer of imported goods registered under rule 174; (h) an invoice issued by a manufacturer of final products for clearance of inputs or capital goods as such. Explanation.- For the purposes of this section,- (i) "first stage dealer" means a dealer who purchases the goods directly from- (a) the manufacturer under the cover of an invoice issued under rule 52A or rule 1OOE 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 (b) 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; (ii) "second stage dealer" means a dealer who purchases the goods from a first stage dealer. (2)(a) The manufacturer shall take all reasonable steps to ensure that the inputs or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 Commissioner. 57AG. Transitional provision.- (1) Any amount of credit earned by a manufacturer under rules 57A, 57B or 57Q as they existed prior to 1st day of April, 2000 and remaining unutilized on that day shall be allowable as CENVAT credit to such manufacturer under these rules, and be allowed to be utilized in accordance with these rules. (2) A manufacturer who opts for exemption from the whole of the duly 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 availing of the credit of the duty paid on inputs before such option is exercised. shall be required to pay an amount equivalent to the credit. if any, allowed to him in respect of inputs lying in stock or used in any finished excisable goods 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed to take credit of the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985, leviable under the Central Excise Act, 1944 in relation to the goods falling under sub-heading Nos. 2401.90, 2404.99, 5402.20, 5402.32, 5402.42, 5402.43, 5402.52, 5402.62, 8415.00, 8702.10, 8703.90, 8706.21 and 8706.39 of the said First Schedule received in his factory on or after the 1st day of March, 2000. 57AJ. Special dispensation in respect of inputs manufactured in factories located in specified areas of North East region,- Notwithstanding anything contained in these rules, where a manufacturer has cleared any inputs or capital goods, in terms of notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/99-Central Excise, dated the 8th July, 1999, or notification No. 33/99-Central Excise, dated tile 8th July, 1999, the CENVAT credit of duty paid 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. 57AK. Power of Central Government to notify goods for deemed credit.- Notwithstanding anything contained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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