Monday, August 02, 2010

CHANGES IN CENTRAL EXCISE LAW AFTER BUDGET


 

by


 

K. VIJAY KUMAR1

MA, BL, B.Ed, MBA

Superintendent of Central Excise


 

There have been several landmark changes in the rules after the budget. Because of the frequent and repeated changes, it has become difficult to keep track of the latest. The important changes brought out after the budget are listed below with brief notes. It is hoped, this would be of some use to the assessees and officers among ELT readers. Notifications issued upto 1.8.2000 are covered.


 

  1. Notification No.21 /2000 - CE (NT) dated 8-3-2000 ( Covered in ELT, 1st April 2000)

This amends rule 220 B. As per Rule 220 B, the Commissioner may authorise any officer subordinate to him to take steps to attach the property, when so ordered by the Settlement Commission. Now as per this amendment the Commissioner can authorise only an officer not below the rank of an Assistant Commissioner.


 

  1. Notification No.27/2000 - CE (NT) dated 31-3-2000 ( Covered in ELT, 15th April 2000)

The new Cenvat Rules 57AA to 57AK incorporated into the rules by this notification. Brief details.

57AA.     : Definitions; HSD not an input

57AB.     

  1. Cenvat allowed on specified duty paid on inputs or capital goods received in the factory on or after 1.4.2000
  2. Cenvat allowed for project imports
  3. Credit can be used for payment of duty on any final product or the inputs or capital goods removed as such
  4. Inputs or capital goods to be removed as such as if manufactured in the factory and on payment of appropriate duty, under an invoice under rule 52A
  5. Credit for EOUs restricted to the additional duty under section 3 of the Customs Tariff Act.
  6. Capital goods credit restricted to 50% in the first year
  7. No Cenvat on duty claimed as depreciation
  8. Inputs and capital goods and moulds etc can bee sent to job worker
  9. Finished goods can be cleared from the job worker's premises.
  10. Refund of credit in cases of export
  11. No credit on inputs used in the manufacture of exempted final products ¨

    separate accounts or 8% of the price.


 


 

57AE :     1. Documents for taking credit

    2. Manufacturer to take reasonable steps

         3. Maintain records

4. File a monthly return

57 AF     : Transfer of Credit

57 AG    : Transitional provisions

57 AH     : Recovery of wrong credit

57AI     : Credit of SED

57 AJ     : Special for NE area

57 AK     : deemed credit.


 

3. Notification No.31 /2000 - CE (NT) dated 31-3-2000 ( Covered in ELT, 15th April 2000)

This amends various rules of the CE Rules as follows:

  1. Rule 9(1) required that no excisable goods shall be removed except on payment of duty and except on presentation of an application in the proper form and on obtaining the permission of the proper officer. This was amended with " the excise duty leviable thereon is determined and indicated on each application in the proper form or on each GATE PASS ,as the case may be…." Yes the amended rule speaks of a gate pass. Six years after its gone from the statute, the gate pass again surfaces, surprisingly now in the rules.
  2. Rule 49 amended to provide for fortnightly payment of duty.
  3. Rule 52A amended to delete the words " TO BE USED FOR TAKING CREDIT UNDER RULE 57G AND RULE 57 T" from the duplicate copy of the invoice. Now there is no restriction of the duplicate copy of the invoice being the proper document for taking credit.
  4. New rule 52 AA introduced; this is a true copy of the old rule 57GG with very minor changes. Sub rule 5(c) stipulates that the invoices issued by importers and second stage dealers are to be authenticated by the proper officer. This stipulation was contained rule 57 G(3) earlier. 52AA (12) requires the dealer to submit duplicate copies of the invoice to the range office. Why duplicate copy, when there is no restriction of duplicate copy for taking Cenvat credit?

    The heading of rule 52AA says " Procedure for issuing invoices under rule 57 AE". 57 AE does not deal with issuing invoices; in fact it deals with receiving invoices. There is no question of issuing invoices under 57AE, then where is the question of procedure? Of course the old rule 57 GG also had this infirmity. This is a gross mistake continuing in the statute for the last six years, which unfortunately nobody feels like correcting. I had pointed this in two of my earlier articles in ELT and so did several others. But somehow it got stuck into the law.

  5. Rule 100 E amended to provide for fortnightly payment for 100% EOUs.


 

  1. Notification No.33/2000 - CE (NT) dated 7-4-2000 ; ( Covered in ELT, 15th April 2000)

    Prescribes the details required in the invoice issued by dealers.

  2. Notification No.34/2000 - CE (NT) dated 11-4-2000 . ( Covered in ELT, 1st May 2000) Further amends rules 49 and 173G to provide for payment of fortnightly duty by 20thof the month and 5th of the following month.
  3. Notification No.35/2000 - CE (NT) dated 28-4-2000. ( Covered in ELT, 15th May 2000) Procedure and application for refund of duty under rule 57AC i.e. unutilised credits in respect of exports.
  4. Notification No.36/2000 - CE (NT) dated 2 8-4-2000. ( Covered in ELT, 15th May 2000) prescribes the proforma for monthly return by dealers ;rule 57 AE
  5. Notification No.38/2000 - CE (NT) dated 12-5-2000 : ( Covered in ELT, 15th May 2000) The following rules omitted:-


 

  1. 9 (2)         : penalty for removal of goods without payment of duty
  2. 14A          : penalty for failure to furnish proof of export
  3. 14B          : penalty for removing goods, the duty on which exceeds              bond amount.
  4. 52A(8)      : penalty for transporting excisable goods without a valid                 invoice
  5. 57      : general offences and penalties
  6. 96ZE     : Penalty for misdeclaration – steel patties
  7. 151         : Offences with respect to warehousing.
  1. 173Q(2)     :Penalties in certain cases: (rule 173 Q(1) amended to restrict             the penalty to the duty payable)
    1. 209A(2)     : similar to (h) above
    2. 210         : general penalty under this rule increased from Rs.1000/- to
      Rs. 5000/-
    3. 226     : maintenance of records and penalty.


 

  1. Notification No.39/2000 - CE (NT) dated 12-5-2000 : ( Covered in ELT, 15th May 2000) Fixes rate of interest at 24% for Section 11AA cases.
  2. Notification No.40/2000 - CE (NT) dated 12-5-2000 : ( Covered in ELT, 15th May 2000) Fixes rate of interest at 24% for Section 11AB cases.
  3. Notification No.42/2000 - CE (NT) dated 5.6.2000 (Covered in ELT, 1st July 2000) amends rule 49 to add a sub rule 1A. This has an interesting backdrop. The old rule 49(1) had a proviso that when goods are not properly accounted for or are not lost or destroyed by natural causes or by unavoidable accident, duty shall be paid on demand. There was also a proviso that the proper officer may not demand duty due if the goods are unfit for consumption or marketing. When rule 49(1) was substituted by a new rule vide notification No. 31/2000, these important provisions were not incorporated in the new sub rule 1. This omission is now made good.
  4. Notification No.44/2000 - CE (NT) dated 30-6-2000 : ( Covered in ELT, 15th July 2000) : Amends certain rules viz:-
    1. rule 47(4) omitted – Entry book
    2. rule 53 amended consequent to doing away with RG-1; 53(3) omitted to do away with pre authentication of books of account.
    3. Rule 54 amended to provide for submission of RT-3 within 10 days of the close of the month instead of 5 days.
    4. 57AE amended to provide for filing the return within 10 days instead of 5 days of the closure of the month.
    5. 100 F amended to submit monthly return by EOUs within 10 days instead of 7 days.
    6. Consequential changes in 173G
    7. Important forms like EB4,RG-1, RG3,RG16,RG23A and RG23 C, WRG omitted
    8. New RG23-D inserted.


 

  1. Notification No.45/2000 - CE (NT) dated 30-6-2000 : ( Covered in ELT, 15th July 2000) New Valuation Rules. No comments as several articles have come on this and it is better to study the rules in detail.


 

****** EXCISE LAW TIMES – 15.10. 2000 – A 92

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