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Seeks to further amend the CENVAT Credit Rules 2004.

Central Excise - 13/2016 - Dated:- 1-3-2016 - GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 13/2016- Central Excise (N.T.) New Delhi, the 1st March, 2016. G.S.R. 244 (E).- In exercise of the powers conferred by section 37 of the Central Excise Act,1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:- 1. (1) These rules may be called .....

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pment or appliance used in an office shall be omitted; (iii) in condition (1A), after the words "generation of electricity , the words "or for pumping of water shall be inserted; (b) in clause (e), after entry (3), for the long line, the following shall be substituted with effect from 1st March, 2016, namely:- "but shall not include a service - (a) which is exported in terms of rule 6A of the Service Tax Rules, 1994; or (b) by way of transportation of goods by a vessel from custom .....

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or item (C), the following item shall be substituted, namely:- "(C) capital goods, except when,- (i) used as parts or components in the manufacture of a final product; or (ii) the value of such capital goods is upto ten thousand rupees per piece; ; (d) in clause (m), after the words "producer or provider , the words "or an outsourced manufacturing unit shall be inserted. 3. In rule 3 of the said rules, in sub-rule (4),- (i) in the fifth proviso, for the words and figures "sai .....

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AT credit shall not be utilised for payment of Infrastructure Cess leviable under sub-clause (1) of clause 159 of the Finance Bill, 2016: . 4. In rule 4 of the said rules,- (a) in sub-rule (2), in clause (a), for the Explanation, the following shall be substituted with effect from 1st day of March, 2016, namely:- "Explanation. - For the removal of doubts, it is hereby clarified that- (i) an assessee engaged in the manufacture of articles of jewellery, other than articles of silver jewellery .....

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es 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 four hundred lakhs. . (b) in sub-rule (5), for clause (b), the following clause shall be substituted, namely:- "(b) The CENVAT credit shall also be allowed to a manufacturer of final products in respect of jigs, fixtures, moulds and dies or tools falling under Chapter 82 of the First Schedule to the Excise Tariff Act, sent by such m .....

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(6), for the words 'valid for a financial year , the words "valid for three financial years shall be substituted. (d) in sub-rule (7), after the fifth proviso, the following provisos shall be inserted namely,- "Provided also that CENVAT Credit of Service Tax paid on the charges paid or payable for the service provided by way of assignment, by the Government or any other person, of the right to use any natural resource, shall be spread over such period of time as the period for whic .....

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ghts have been assigned Provided also that where the manufacturer of goods or provider of output service, as the case may be, further assigns such right to use assigned to him by the Government or any other person, in any financial year, to another person against a consideration, such amount of balance CENVAT credit as does not exceed the service tax payable on the consideration charged by him for such further assignment, shall be allowed in the same financial year: Provided also that CENVAT cre .....

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sed in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services and the credit not allowed shall be calculated and paid by the manufacturer or the provider of output service, in terms of the provisions of sub-rule (2) or sub-rule (3), as the case may be : 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 i .....

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ing 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. 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, suc .....

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effect, not be eligible for credit of any inputs and input services. ; (c) for sub-rule (3), the following sub-rule shall be substituted, namely:- "(3) (a) A manufacturer who manufactures two classes of goods, namely :- (i) non-exempted goods removed; (ii) exempted goods removed; or (b) a provider of output service who provides two classes of services, namely:- (i) non-exempted services; (ii) exempted services, shall follow any one of the following options applicable to him, namely :- (i) .....

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f 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 seven per cent. of the value so exempted : Provided also 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 two per cent. of value of the exempted services. Explanation 1.- If the manufacturer of good .....

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b-rule(3A),- (a) "non-exempted goods removed means the final products excluding exempted goods manufactured and cleared upto the place 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. ; (d) for sub-rule (3A), the following sub-rule shall be substituted, namely :- "(3A) For determination of amount required to be paid under clause .....

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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 removed or for the provision of non-exempted services and description of such non-exempted goods removed and non-ex .....

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i) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services shall be called ineligible credit, denoted as A, and shall be paid; (ii) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services shall be called eligible credit, den .....

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exempted services shall be called ineligible common credit, denoted as D and calculated as follows and shall be paid, - D = (E/F) x C; where E is the sum total of - (a) value of exempted services provided; and (b) value of exempted goods removed, during the preceding financial year; where F is the sum total of- (a) value of non-exempted services provided, (b) value of exempted services provided, (c) value of non-exempted goods removed, and (d) value of exempted goods removed, during the precedi .....

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d 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 pay .....

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n or in relation to the manufacture of exempted goods removed or for provision of exempted services on the basis of inputs and input services actually so used during the financial year, shall be called Annual ineligible credit and denoted as A(Annual); (ii) the CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services on the basis of inputs and input services actually s .....

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ervices provided; and (b) value of exempted goods removed; during the financial year ; where I is sum total of - (a) value of non-exempted services provided, (b) value of exempted services provided, (c) value of non-exempted goods removed; and (d) value of exempted goods removed; during the financial year; (d) the manufacturer or the provider of output service shall pay on or before the 30th June of the succeeding financial year, an amount equal to difference between the total of the amount of A .....

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f credit so paid under clause (d), be liable to pay on such amount an interest at the rate of fifteen per cent. per annum, from the 30th June of the succeeding financial year till the date of payment of such amount; (f) the manufacturer or the provider 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 .....

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, 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); (iii) amount determined and paid as per the provisions of .....

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sub-rule (3A), the Central Excise Officer competent to adjudicate a case based on amount of CENVAT credit involved, may allow such manufacturer or provider of output service to follow the procedure and pay the amount referred to in clause (ii) of sub-rule (3), calculated for each of the months, mutatis-mutandis in terms of clause (c) of sub-rule (3A), with interest calculated at the rate of fifteen per cent. per annum from the due date for payment of amount for each of the month, till the date .....

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lowing sub-rule shall be substituted, namely:- "(3B) A banking company and a financial institution including a non-banking financial company, engaged in providing services by way of extending deposits, loans or advances, in addition to options given in sub-rules (1), (2) and (3), shall have the option to pay for every month an amount equal to fifty per cent. of the CENVAT credit availed on inputs and input services in that month. ; (g) for sub-rule (4), the following sub-rule shall be subst .....

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of clearances made or services provided in a financial year: Provided that where capital goods are received after the date of commencement of commercial production or provision of services, as the case may be, the period of two years shall be computed from the date of installation of such capital goods. (h) in sub-rule (7), after the words when a service is exported , the words or when a service is provided or agreed to be provided by way of transportation of goods by a vessel from customs stati .....

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n 4, subject to the following conditions, namely :- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; (b) the credit of service tax attributable as input service to a particular unit shall be distributed only to that unit; (c) the credit of service tax attributable as input service to more than one unit but not to all the units shall be distributed only amongst such units to which the input service is attributable and such .....

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, which are operational in the current year, during the said relevant period; (e) outsourced manufacturing unit shall maintain separate account for input service credit received from each of the input service distributors and shall use it only for payment of duty on goods manufactured for the input service distributor concerned; (f) credit of service tax paid on input services, available with the input service distributor, as on the 31st of March, 2016, shall not be transferred to any outsourced .....

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cludes the premises of a provider of output service or the premises of a manufacturer including the factory, whether registered or otherwise or the premises of an outsourced manufacturing unit. Explanation 2.-For the purposes of this rule, the total turnover shall be determined in the same manner as determined under rule 5: Provided that the turnover of an outsourced manufacturing unit shall be the turnover of goods manufactured by such outsourced manufacturing unit for the input service distrib .....

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ch credit is to be distributed. Explanation 4. For the purposes of this rule, outsourced manufacturing unit means a job-worker who is liable to pay duty on the value determined under rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 on the goods manufactured for the input service distributor or a manufacturer who manufactures goods, for the input service distributor under a contract, bearing the brand name of such input service distributor and is li .....

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