[TO
BE PUBLISHED IN GAZETTE OF INDIA, EXTRAORDINARY, PART –II, SECTION 3,
SUB-SECTION (i)]
GOVERNMENT
OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification
No. 20/2017 - Central Excise (N.T.)
New Delhi, the
30th June, 2017
G.S.R. (E).- In exercise of the powers conferred by
section 37 of the Central Excise Act, 1944 (1 of 1944) and in supersession of
the CENVAT Credit Rules, 2004, except as respects things done or omitted to be
done before such supersession, the Central Government hereby makes the
following rules, namely:-
1. Short title, extent and commencement. -
(1) These rules may be called the CENVAT Credit Rules, 2017.
(2) They extend to the whole of India.
(3) They shall come into force on the 1 st day of
July, 2017.
2. Definitions. – (1)
In these rules, unless the context otherwise requires,-
(a) "Customs
Tariff Act" means the Customs Tariff Act, 1975 (51 of 1975);
(b) “electronic credit
ledger” means the electronic credit ledger referred to in sub-section (46) of
section 2 of the Central Goods and Services 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 Page 2 of 16
(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 semi-finished
goods supplied to the job worker, so as to complete a part or whole of the
process resulting in the manufacture or finishing of an article or any
operation which is essential for aforesaid process and the expression "job
worker" shall be construed accordingly;
(i)
"notification" means the notification published in the Official
Gazette;
(j) “person” means the
person referred to in sub-section (84) of section 2 of the Central Goods and
Services Tax Act, 2017 (12 of 2017);
(k) "place of
removal" means-
(i) a factory or any
other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any
other place or premises wherein the excisable goods have been permitted to be
deposited without payment of duty;
(iii) a depot, premises
of a consignment agent or any other place or premises from where the excisable
goods are to be sold after their clearance from the factory,
from where such goods
are removed;
(l) "second stage
dealer" means a dealer who purchases the goods from a first stage dealer;
(2) The words and
expressions used in these rules and not defined but defined in the Excise Act
shall have the meanings respectively assigned to them in the Excise Act.
3. CENVAT credit. -
(1) A manufacturer or producer of final products shall be allowed to take
credit (hereinafter referred to as the CENVAT credit) of – (a) the duty of
excise specified in the Fourth Schedule to the Excise Act, as leviable under
the said Act,
(a) the duty of excise
specified in the Fourth Schedule to the Excise Act, as leviable under the said
Act,
(b) the National
Calamity Contingent duty leviable under section 136 of the Finance Act, 2001
(14 of 2001);
(c) the additional duty
leviable under Section 3 of the Customs Tariff Act, equivalent to the duty of
excise as specified under clauses (a) and (b);
d) the additional duty
leviable under sub-section (5) of section 3 of the Customs Tariff Act;
(e) the additional duty
of excise leviable under Section 85 of Finance Act, 2005 (18 of 2005) Page 3 of
16 paid on
any input received in
the factory of manufacture of final product on or after the 1 st day of July,
2017 including the said duties paid on any input 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 25th
March, 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 uany input
received in the factory of manufacture of final product on or after the 1 st
day of July, 2017 including the said duties paid on any input 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 25th March, 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 quarter, as
the case may be:
Provided
also that the CENVAT credit of any duty specified in sub-rule (1), except the
National Calamity Contingent duty under clause (b) thereof, shall not be
utilised for payment of the National Calamity Contingent duty leviable under
section 136 of the Finance Act, 2001 (14 of 2001):
Provided
also that the CENVAT credit of any duty mentioned in sub-rule (1), other than
credit of additional duty of excise leviable under section 85 of Finance Act,
2005 (18 of 2005), shall not be utilised for payment of said additional duty of
excise on final products.
(4) Notwithstanding
anything contained in sub-rule (1) and sub-rule (3), CENVAT credit in respect
of –
(i) the National
Calamity Contingent duty leviable under section 136 of the Finance Act, 2001
(14 of 2001);
(ii) the additional
duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty
of excise specified under item (i) above;
(iii) the additional duty of excise leviable
under section 85 of Finance Act, 2005 (18 of 2005),
shall be utilised
towards payment of duty of excise under the said National Calamity Contingent
duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), or the
additional duty of excise leviable under section 85 of Finance Act, 2005 (18 of
2005) respectively, on any final products manufactured by the manufacturer or
for payment of such duty on inputs themselves, if such inputs are removed as
such or after being partially processed.
4. CENVAT credit in certain cases.-
(1) When inputs on which CENVAT credit has been taken, are removed as such from
the factory, the manufacturer of the final products shall pay an amount equal
to the credit availed in respect of such inputs and such removal shall be made
under the cover of an invoice referred to in rule 11.
(2) If the value of any
input, on which CENVAT credit has been taken is written off fully or partially
or where any provision to write off fully or partially has been made in the
books of account then the manufacturer shall pay an amount equivalent to the
CENVAT credit taken in respect of the said input:
Provided
that if the said input is subsequently used in the manufacture of final
products, the manufacturer shall be entitled to take the credit of the amount
equivalent to the CENVAT credit paid earlier subject to the other provisions of
these 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-availability of credit of duty paid on any
input, if the credit of duty paid on input is availed, the reversal of such
credit after clearance of the goods (after the due date for payment of duty on
such goods) shall render the manufacturer eligible for the exemption.
6. 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 or in the premises of the job
worker, in case goods are sent directly to the job worker on the direction of
the manufacturer:
Provided
that the manufacturer shall not take CENVAT credit after one year of the date
of issue of any of the documents specified in sub- rule (1) of rule 11.
(2) (a) The CENVAT
credit on inputs shall be allowed even if any inputs as such or after being
partially processed are sent to a job worker and from there subsequently sent
to another job worker and likewise, for further processing, testing, repairing,
re-conditioning or for the manufacture of intermediate goods necessary for the
manufacture of final products or any other purpose, and it is established from
the records, challans or memos or any other document produced by the
manufacturer taking the CENVAT credit that the inputs or the products produced
therefrom are received back by the manufacturer, within one hundred and eighty
days of their being sent from the factory:
Provided
that credit shall also be allowed even if any inputs are directly sent to a job
worker without their being first brought to the premises of the manufacturer,
and in such a case, the period of one hundred and eighty days shall be counted
from the date of receipt of the inputs by the job worker;
(b) if the inputs are
not received back within the time specified under sub-clause (a) by the
manufacturer, the manufacturer shall pay an amount equivalent to the CENVAT
credit attributable to the inputs, by debiting the CENVAT credit or otherwise,
but the manufacturer may take the CENVAT credit again when the inputs are
received back in the factory.
(3) The Deputy
Commissioner of Central Excise or the Assistant Commissioner of Central Excise,
as the case may be, having jurisdiction over the factory of the manufacturer of
the final products who has sent the input or partially processed inputs outside
his factory to a jobworker may, by an order, which shall be valid for three
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 manufacturer who clears a final product or an intermediate product for
export without payment of duty under bond or letter of undertaking, shall be
allowed refund of CENVAT credit as determined by the following formula subject
to procedure, safeguards, conditions and limitations, as may be specified by
the Board by notification in the Official Gazette:
Refund amount= (Export
turnover of goods) x Net CENVAT Credit
Total turnover
Where,-
(a) "Refund
amount" means the maximum refund that is admissible;
(b) "Net CENVAT
credit" means total CENVAT credit availed on inputs by the manufacturer
reduced by the amount reversed in terms of sub-rule (3) of rule 4, during the
relevant period;
(c) "Export
turnover of goods" means the value of final products and intermediate
products cleared during the relevant period and exported without payment of
Central Excise duty under bond or letter of undertaking;
(d) "Total
turnover" means sum total of the value of –
(i) all excisable goods
cleared during the relevant period including exempted goods, dutiable goods and
excisable goods exported;
(ii) all inputs removed
as such under sub-rule (1) of rule 4 against an invoice, during the period for
which the claim is filed.
(2) No refund of credit
shall be allowed if the manufacturer avails of drawback allowed under the
Customs and Central Excise Duties and Service Tax Drawback Rules, 1995, or
claims rebate of duty under the Central Excise Rules, 2002 or Central Excise
Rules, 2017, as the case may be, in respect of such duty.
Explanation 1. - For
the purposes of this rule,
(1) "export
goods" means any goods which are to be taken out of India to a place
outside India.
(2) "relevant
period" means the period for which the claim is filed
8. Obligation of a manufacturer or
producer of final products.- (1) The CENVAT credit
shall not be allowed on such quantity of input as is used in or in relation to
the manufacture of exempted goods and their clearance upto the place of removal
and the credit not allowed shall be calculated and paid by the manufacturer, in
terms of the provisions of sub-rule (2) or sub-rule (3), as the case may be.
Explanation 1.- For the
purposes of this rule, exempted goods or final products as defined in clauses
(d) and (e) of rule 2 shall include non-excisable goods cleared for a
consideration from the factory.
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 payable under clause (i):
Explanation 1.- If the
manufacturer of goods avails any of the option under this sub-rule, he shall
exercise such option for all exempted goods manufactured by him and such option
shall not be withdrawn during the remaining part of the financial year.
Explanation 2.- No
CENVAT credit shall be taken on the duty paid on any goods that are not inputs.
Explanation 3.- For the
purposes of this sub-rule and sub-rule (4),-
(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;
(4) For determination
of amount required to be paid under clause (ii) of sub-rule (3), the
manufacturer of goods shall follow the following procedure and conditions,
namely:-
(a) the manufacturer of
goods shall intimate in writing to the Superintendent of Central Excise giving
the following particulars, namely :-
(i) name, address and
registration number of the manufacturer of goods;
(ii) date from which
the option under this clause is exercised or proposed to be exercised;
(iii) description of inputs
used exclusively in or in relation to the manufacture of exempted goods removed
and description of such exempted goods;
(iv) description of
inputs used exclusively in or in relation to the manufacture of nonexempted
goods removed and description of such non-exempted goods removed;
(v) CENVAT credit of
inputs lying in balance as on the date of exercising the option under this
condition;
(b) the manufacturer of
final products shall determine the credit required to be paid, out of this
total credit of inputs taken during the month, denoted as „T?, in the following
sequential steps and provisionally pay every month, the amounts determined
under sub-clauses (i) and (iv), namely:-
(i) the amount of
CENVAT credit attributable to inputs used exclusively in or in relation to the
manufacture of exempted goods removed shall be called ineligible credit,
denoted as „A?, and shall be paid;
(ii) the amount of
CENVAT credit attributable to inputs used exclusively in or in relation to the
manufacture of non-exempted goods removed shall be called eligible credit,
denoted as „B?, and shall not be required to be paid;
(iii) credit left after
attribution 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 out of the total credit „T?,
which is sum total of A, B, D, and G, the manufacturer 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
fails to pay the amount determined under sub-clause (i) or subclause (iv), he
shall be liable to pay the interest from the due date of payment till the date
of payment of such amount, at the rate of fifteen per cent. per annum;
(c) the manufacturer
shall determine the amount of CENVAT credit attributable to exempted goods
removed for the whole of financial year, out of the total credit denoted as „T?
(Annual) taken during the whole of financial year in the following manner,
namely :-
(i) the CENVAT credit
attributable to inputs used exclusively in or in relation to the manufacture of
exempted goods removed on the basis of inputs 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 used exclusively in or in relation to the manufacture of
non-exempted goods removed on the basis of inputs actually so used shall be
called Annual eligible credit and denoted as B (Annual);
(iii) common credit
left for further attribution shall be denoted as C(Annual) and calculated as, -
C(Annual) = T(Annual) -
[A(Annual) + B(Annual)];
(iv) common credit attributable
towards exempted goods removed shall be called Annual ineligible common credit,
denoted by D(Annual) and shall be calculated as, -
D(Annual) = (H/I) x
C(Annual);
where H is sum total of
value of exempted goods removed during the financial year;
where I is sum total of
–
(a) value of non-exempted
goods removed; and
(b) value of exempted
goods removed;
during the financial
year;
(d) the manufacturer
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 Annual ineligible
credit and Annual ineligible common credit and the aggregate amount of
ineligible credit and ineligible common credit for the period of whole year,
namely:-
[{A(Annual) +
D(Annual)} - {(A+D) aggregated for the whole year)}], where the former of the
two amounts is greater 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 Page 10 of 16 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, 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 clause (d), if any, with the date of payment
of the amount;
(iv) interest payable
and paid, if any, determined as per the provisions of clause (e); and
(v) credit determined
and taken as per the provisions of clause (f), if any, with the date of taking
the credit.
(5) Where a
manufacturer has failed to exercise the option under sub-rule (3) and follow
the procedure provided under sub-rule (4), the Central Excise Officer competent
to adjudicate a case based on amount of CENVAT credit involved, may allow such
manufacturer 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 (4), 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 of payment thereof.
(6) Payment of an
amount under sub-rule (3) shall be deemed to be CENVAT credit not taken for the
purpose of an exemption notification wherein any exemption is granted on the
condition that no CENVAT credit of inputs shall be taken.
Explanation I. -
"Value" for the purpose of sub-rules (3) and (4) shall have the same
meaning as assigned to it under section 3, 4 or 4A of the Excise Act, read with
rules made thereunder;
Explanation II. - The
amount mentioned in sub-rules (3) and (4), 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 III. - If
the manufacturer of goods fails to pay the amount payable under subrules (3)
and (4), it shall be recovered, in the manner as provided in rule 16, for
recovery of CENVAT credit wrongly taken.
Explanation IV.- 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 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, number G.S.R. 163(E), dated the 17th
March, 2012; or
(v) cleared for export
under bond in terms of the provisions of the Central Excise Rules, 2017.
9. Distribution of credit on inputs by
warehouse of manufacturer. - (1) A manufacturer
having one or more factories, shall be allowed to take credit on inputs
received under the cover of an invoice issued by a warehouse of the said
manufacturer, who receives inputs under cover of documents specified under Rule
11, towards the purchase of such inputs.
(2) The provisions of
these rules or any other rules made under the Excise Act as applicable to a
first stage dealer or a second stage dealer, shall, mutatis mutandis, apply to
such warehouse of the manufacturer.
10. Storage of input outside the factory of
the manufacturer. - The Deputy Commissioner of Central
Excise or the Assistant Commissioner of Central Excise, as the case may be,
having jurisdiction over the factory of a manufacturer of the final products
may, in exceptional circumstances having regard to the nature of the goods and
shortage of storage space at the premises of such manufacturer, by an order,
permit such manufacturer to store the input in respect of which CENVAT credit
has been taken, outside such factory, subject to such limitations and
conditions as he may specify:
Provided
that where such input is not used in the manner specified in these rules for
any reason whatsoever, the manufacturer of the final products shall pay an
amount equal to the credit availed in respect of such input.
11. Documents and accounts.
- (1) The CENVAT credit shall be taken by the manufacturer on the basis of any
of the following documents, namely
(a) an invoice issued
by-
(i) a manufacturer for
clearance of –
(I) inputs from his
factory or depot or from the 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;
(II) inputs as such;
(ii) an importer;
(iii) an importer from
his depot or from the premises of the consignment agent of the said importer if
the said depot or the premises, as the case may be, is registered in terms of
the provisions of Central Excise Rules, 2017;
(iv) a first stage
dealer or a second stage dealer, as the case may be; or
(b) a supplementary
invoice, issued by a manufacturer or importer 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 a
Foreign Post Office or an authorised Courier, registered with the Principal
Commissioner of Customs or the Commissioner of Customs in-charge of the Customs
airport, as the case may be:
Provided
that the credit of additional duty of customs levied under sub-section (5) of
section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if
the invoice or the supplementary invoice, as the case may be, bears an
indication to the effect that no credit of the said additional duty shall be
admissible.
(2) No CENVAT credit
under sub-rule (1) shall be taken unless all the particulars as prescribed
under the Central Excise Rules, 2017 are contained in the said document:
Provided
that if the said document does not contain all the particulars but contains the
details of duty payable, description of the goods, assessable value, Central Excise
registration number of the person issuing the invoice, name and address of the
factory or warehouse or premises of first or second stage dealers, and the
Deputy Commissioner of Central Excise or the Assistant Commissioner of Central
Excise, as the case may be, is satisfied that the goods covered by the said
document have been received and accounted for in the books of the account of
the receiver, he may allow the CENVAT credit.
(3) The CENVAT credit
in respect of input purchased from a first stage dealer or second stage dealer
shall be allowed only if such first stage dealer or second stage dealer, as the
case may be, has maintained records indicating the fact that the input was
supplied from the stock on which duty was paid by the producer of such input
and only an amount of such duty on pro rata basis has been indicated in the
invoice issued by him:
Provided
that provisions of this sub-rule shall apply mutatis mutandis to an importer
who issues an invoice on which CENVAT credit can be taken.
(4) The manufacturer of
final products shall maintain proper records for the receipt, disposal,
consumption and inventory of the input in which the relevant information
regarding the value, duty paid, CENVAT credit taken and utilised, the person
from whom the input have been procured is recorded and the burden of proof
regarding the admissibility of the CENVAT credit shall lie upon the
manufacturer taking such credit.
(5) The manufacturer of
final products shall submit within ten days from the close of 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, 2017, in so far as they relate to annual
return shall, mutatis-mutandis, apply to the annual return required to be filed
under this rule.
13. Transfer of CENVAT credit. -
(1) If a manufacturer of the final products shifts his factory to another site
or the factory is transferred on account of change in ownership or on account
of sale, merger, amalgamation, lease or transfer of the factory to a joint
venture with Page 14 of 16 the specific provision for transfer of liabilities
of such factory, then, the manufacturer shall be allowed to transfer the CENVAT
credit lying unutilised in his accounts 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, is also transferred along with the factory or business
premises to the new site or ownership and the inputs, on which credit has been
availed of are duly accounted for to the satisfaction of the Deputy
Commissioner of Central Excise or the Assistant Commissioner of Central Excise,
as the case may be.
(3) Subject to the
provisions contained in sub-rule (2), the transfer of the CENVAT credit shall
be allowed within a period of three months from the date of receipt of
application by the Deputy Commissioner of Central Excise or Assistant
Commissioner of Central Excise, as the case may be:
Provided
that the period specified in this sub-rule may, on sufficient cause being shown
and reasons to be recorded in writing, be extended by the Principal
Commissioner of Central Excise or Commissioner of Central Excise, as the case
may be, for a further period not exceeding six months.
14. Transfer of CENVAT credit of additional
duty leviable under sub-section (5) of section 3 of the Customs Tariff Act. -
(1) A manufacturer or producer of final products, having more than one
registered premises, for each of which registration under the Central Excise
Rules, 2017 has been obtained on the basis of a common Permanent Account Number
under the Income-tax Act, 1961 (43 of 1961), may transfer unutilised CENVAT
credit of additional duty leviable under sub-section (5) of section 3 of the
Customs Tariff Act, lying in balance with one of his registered premises at the
end of a quarter, to his other registered premises by-
(i) making an entry for
such transfer in the documents maintained under 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 1 st 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 registered under the Central Goods
and Services Tax Act, 2017 (12 of 2017), who was not required to register under
the Excise Act shall be deemed to be in possession of a document evidencing
payment of duty, if the manufacturer of the specified goods on which duty of
Central Excise was leviable has issued a credit transfer document to him, in
relation to such specified goods held in stock by him on 1st of July, 2017, for
which he was not in a possession of invoice evidencing payment of duty.
(b) The credit transfer
document under clause (a) shall be issued by the manufacturer of specified
goods subject to such conditions, procedures and safeguards as may be notified
by the Central Government.
Explanation.-
"Specified goods" for the purpose of sub-rule (2) shall mean such
goods which have a value more than rupees twenty five thousand per piece and
bear the brand name of the manufacturer or the principal manufacturer and are
identifiable by a distinct number such as chassis or engine number of a car
16. Recovery of CENVAT credit wrongly taken
or erroneously refunded. - (1) Where the CENVAT credit has
been taken wrongly but not utilised, the same shall be recovered from the
manufacturer, and the provisions of section 11A of the Excise Act shall apply
mutatis mutandis for effecting such recoveries;
(2) Where the CENVAT
credit has been taken and utilised wrongly or has been erroneously refunded,
the same shall be recovered along with interest from the manufacturer and the
provisions of sections 11A and 11AA of the Excise Act shall apply mutatis
mutandis for effecting such recoveries.
17. Confiscation and penalty. -
(1) If any person, takes or utilises CENVAT credit in respect of input, wrongly
or in contravention of any of the provisions of these rules, then, all such
goods shall be liable to confiscation and such person, shall be liable to a
penalty in terms of clause (a) or clause (b) of sub-section (1) of section 11AC
of the Excise Act.
(2) In a case, where
the CENVAT credit in respect of input has been taken or utilised wrongly by
reason of fraud, collusion or any wilful mis-statement or suppression of facts,
or contravention of any of the provisions of the Excise Act, or of the rules
made thereunder with intent to evade payment of duty, then, the manufacturer
shall also be liable to pay penalty in terms of the provisions of 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 Page 16 of 16 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 suspension of registration in case an
importer or of a dealer and type of facilities to be withdrawn and procedure
for issue of such order by the Principal Chief Commissioner of Central Excise
or Chief Commissioner of Central Excise, as the case may be.
20. Supplementary provision. -
(1) Any notification, circular, instruction, standing order, trade notice or
other order issued under the CENVAT Credit Rules, 2004 by the Central
Government, the Central Board of Excise and Customs, the Principal Chief
Commissioner of Central Excise or Chief Commissioner of Central Excise, as the
case may be or the Principal Commissioner of Central Excise or Commissioner of
Central Excise, as the case may be, and in force at the commencement of these
rules, shall, to the extent it is relevant and consistent with these rules, be
deemed to be valid and issued under the corresponding provisions of these
rules.
(2) References in any rule, notification,
circular, instruction, standing order, trade notice or other order to the
CENVAT Credit Rules, 2004 and any provision thereof, on the commencement of
these rules, be construed as references to the CENVAT Credit Rules, 2017 and
any corresponding provision thereof.
[F. No.
267/22/2017-CX.8]
(ROHAN)
Under Secretary to the Government of India
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