TMI BlogSeeks to notify the new CENVAT Credit Rules, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 2017 (12 of 2017) ; (c) Excise Act means the Central Excise Act, 1944 (1 of 1944) ; (d) exempted goods means excisable 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 input; (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, 2017 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 from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice; (g) input means excisable goods used in the factory by the manufacturer of the final product but excludes high speed diesel oil or motor spirit, commonly known as petrol; (h) job work means processing or working upon of raw material or sem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 1986, published in the Gazette of India vide number G.S.R. 547 (E), dated the 25th March, 1986 , and received by the manufacturer for use in, or in relation to, the manufacture of final product, on or after the 1st day of July, 2017. (2) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods manufactured by the said manufacturer or producer cease to be exempted goods or any goods become excisable. (3) The CENVAT credit may be utilised for payment of (a) any duty of excise on any final product; or (b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or (c) an amount under sub rule (2) of rule 15 of Central Excise Rules, 2017 : Provided that while paying duty of excise, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty relating to that month or the quarte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese rules. (3) Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 17 of the Central Excise Rules, 2017 , the CENVAT credit taken on the inputs used in the manufacture or production of said goods shall be reversed. Explanation 1.- The amount payable under sub-rules (1), (2) and (3), unless specified otherwise, shall be paid by the manufacturer of goods by debiting the CENVAT credit or otherwise on or before the 5th day of the following month except for the month of March, where such payment shall be made on or before the 31st day of the month of March. Explanation 2.- If the manufacturer of goods fails to pay the amount payable under sub-rules (1), (2) and (3), it shall be recovered, in the manner as provided in rule 16, for recovery of CENVAT credit wrongly taken and utilised. (4) The amount paid under sub-rule (1) shall be eligible as CENVAT credit as if, it was a duty paid by the person who removed such goods under sub-rule (1). 5. CENVAT credit in exemption cases. -Where the provisions of any other rule or notification provide for grant of whole or part exemption on condition of non-availabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree financial years, in respect of removal of such input or partially processed input, 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. Explanation I.- The amount mentioned in this rule, unless specified otherwise, shall be paid by the manufacturer of goods by debiting the CENVAT credit or otherwise on or before the 5th day of the following month except for the month of March, when such payment shall be made on or before the 31st day of the month of March. Explanation II. - If the manufacturer of goods fails to pay the amount payable under this rule, it shall be recovered, in the manner as provided in rule 16, for recovery of CENVAT credit wrongly taken. Explanation III.- In case of a manufacturer who avails the exemption under a notification based on the value of clearances in a financial year, the expressions, following month and month of March occurring in Explanation I shall be read respectively as following quarter and quarter ending with the month of March . 7. Refund of CENVAT Credit. - (1) A ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (2) A manufacturer who exclusively manufactures exempted goods for their clearance upto the place of removal shall pay the whole amount of credit of input and shall, in effect, not be eligible for credit of any inputs. (3) (a) A manufacturer who manufactures two classes of goods, namely :- (i) non-exempted goods removed; (ii) exempted goods removed, shall follow any one of the following options applicable to him, namely :- (i) pay an amount equal to six per cent . of value of the exempted goods subject to a maximum of the total of opening balance of the credit of input available at the beginning of the period to which the payment relates and the credit of input taken during that period; or (ii) pay an amount as determined under sub-rule (4): Provided that if any duty of excise is paid on the exempted goods, the same shall be reduced from the amount pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttribution of credit under sub-clauses (i) and (ii) shall be called common credit, denoted as C‟ and calculated as,- C = T - (A + B); Explanation.- Where the entire credit has been attributed under sub-clauses (i) and (ii), namely ineligible credit or eligible credit, there shall be left no common credit for further attribution. (iv) the amount of common credit attributable towards exempted goods removed 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 value of exempted goods removed, during the preceding financial year; where F is the sum total of - (a) value of non-exempted goods removed, and (b) value of exempted goods removed, during the preceding financial year: Provided that where no final products were manufactured in the preceding financial year, the CENVAT credit attributable to ineligible common credit shall be deemed to be fifty 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the later; (e) where the amount under clause (d) is not paid by the 30th June of the succeeding financial year, the manufacturer of goods, shall, in addition to the amount of 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, 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 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, inelig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n based on the value of clearances in a financial year, the expressions, following month and month of March occurring in sub-rules (3) and (4) shall be read respectively as following quarter and quarter ending with the month of March . (7) The provisions of sub-rules (1), (2) and (3) shall not be applicable in case the excisable goods removed without payment of duty are either- (i) cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorised operations ; or (ii) cleared to a hundred per cent . export-oriented undertaking; or (iii) supplied to the United Nations or an international organisation 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 (iv) supplied for the use of foreign diplomatic missions or consular missions or career consular offices or diplomatic agents in terms of the provisions of notification No. 12/2012-CE, dated the 17th March, 2012, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of inputs in terms of the provisions of Central Excise Rules, 2017 from his factory or depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty leviable under section 3 of the Customs Tariff Act , has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act , or of the Customs Act, 1962 (52 of 1962) or the rules made there under with intent to 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 leviable under section 3 of the Customs Tariff Act ; or (c) a bill of entry; or (d) a certificate issued by an appraiser of customs in respect of goods imported through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each month to the Superintendent of Central Excise, a monthly return in the form specified, by notification, by the Board: Provided that where a manufacturer is availing exemption under a notification based on the value or quantity of clearances in a financial year, he shall file a quarterly return in the form specified, by notification, by the Board within ten days after the close of the quarter to which the return relates. (6) A first stage dealer or a second stage dealer or a registered importer, as the case may be, shall submit within fifteen days from the close of each quarter of a year to the Superintendent of Central Excise, a return in the form specified, by notification, by the Board: Provided that the first stage dealer or second stage dealer or a registered importer, as the case may be, shall submit the said return electronically. 12 . Annual return. - (1) A manufacturer of final products shall submit to the Superintendent of Central Excise an annual return for each financial year, by the 30th day of November of the succeeding year, in the form as specified by a notification by the Board. (2) The provisions of rule 12 of the Central Excise Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder rule 11; (ii) issuing a transfer challan containing registration number, name and address of the registered premises transferring the credit and receiving such credit, the amount of credit transferred and the particulars of such entry as mentioned in clause (i), and such recipient premises may take CENVAT credit on the basis of the transfer challan. (2) The manufacturer or producer shall submit the monthly return, as specified under these rules, separately in respect of transferring and recipient registered premises. 15. Transitional Provisions.- (1) A person registered under the Central Goods and Services Tax Act, 2017 (12 of 2017) shall transfer the entire CENVAT credit available under the CENVAT Credit Rules, 2004 relating to the period ending with the day immediately preceding the 1st day of July, 2017 in his electronic credit ledger as per Chapter XX of the Central Goods and Services Tax Act, 2017 (12 of 2017) and the rules made thereunder, and any CENVAT credit which is not eligible for such transfer shall not be retained as CENVAT credit unless eligible under these rules. (2)(a) Notwithstanding anything contained in these rules, a person registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f clause (c), clause (d) or clause (e) of sub-section (1) of section 11AC of the Excise Act . (3) Any order under sub-rule (1) or sub-rule (2) shall be issued by the Central Excise Officer following the principles of natural justice. 18. General penalty. - Whoever contravenes the provisions of these rules for which no penalty has been provided in the rules, he shall be liable to a penalty which may extend to five thousand rupees. 19. Power to impose restrictions in certain types of cases. - Notwithstanding anything contained in these rules, where the Central Government, having regard to the extent of misuse of CENVAT credit, nature and type of such misuse and such other factors as may be relevant, is of the opinion that in order to prevent the misuse of the provisions of CENVAT credit as specified in these rules, it is necessary in the public interest to provide for certain measures including restrictions on a manufacturer registered importer, first stage and second stage dealer provider of taxable service or an exporter, may by notification in the Official Gazette, specify the nature of restrictions including restrictions on utilisation of CENVAT credit and suspens ..... 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