TMI BlogSeeks to supersede CENVAT Credit Rules, 2001 with CENVAT Credit Rules, 2002.X X X X Extracts X X X X X X X X Extracts X X X X ..... t; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act, 2001 (14 of 2001); 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 25 th March, 1986, published vide number G.S.R. 547 (E), dated the 25 th 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 manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ElectronicHardwareTechnologyPark or SoftwareTechnologyPark (other than a unit which pays excise duty under section 3 of the Act read with notification No. 8/97- Central Excise, dated the 1 st March, 1997, number G.S.R 114 (E), dated the 1 st March, 1997 or No. 20/2002-Central Excise, dated the 1 st 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 4 th January, 1995, number G.S.R. 189 (E), dated the 4 th 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 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said First Schedule. 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: Provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer 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. ExplanationI.- 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 econom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. (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; o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts 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 Commissioner. 9. Transitional provision.- (1) Any amount of credit earned by a manufacturer under the CENVAT Credit Rules, 2001, as they existed prior to the 1 st 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA) AED (GSI) ADDL. DUTY OTHER (pl. specify) B. CAPITAL GOODS CREDIT Opening balance Credit taken during the month Credit utilized during the month Closing balance CENVAT SED AED (TTA) AED (GSI) ADDL. DUTY OTHER (pl. specify) Place: Date: Signature of the assessee or the authorised signatory Name in capital letters Designation Seal of the assessee [F. No. 334 /1 / 2002-TRU] [Please refer following Notification for further amendments in above rule:- (Ntf. No. 12/2004-CE(N.T.), Dt. 09/07/2004) (Ntf. No. 70/2003-CE(N.T.), DT. 15/09/2003) (Ntf. No. 65/2003-CE(N.T.), DT. 09/09/2003) (Ntf. No. 57/2003-CE(N.T.), DT. 25/06/2003) (Ntf. No. 54/2003-CE(N.T.), Dt. 09/06/2003) (Ntf. No. 52/2003-CE(N.T.), Dt. 06/06/2003) (Ntf. No. 46/2003-CE(N.T.), Dt. 14/05/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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