Notification No. 10 /2008 - Central Excise (N.T.) dated
01.03.2008
Amendments in CENVAT Credit Rules, 2004
G.S.R. (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 the CENVAT Credit (Amendment) Rules, 2008.
(2) Save as otherwise provided in these rules, they shall come into force on the
1st day of April, 2008
2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules),
in rule 2,-
(i) in clause (l), for the words “clearance of final products from the place of
removal”, the words “clearance of final products, upto the place of removal,”
shall be substituted;
(ii) in clause (p), for the words “any taxable service provided by the provider
of taxable service”, the words “any taxable service, excluding the taxable
service referred to in sub-clause (zzp) of clause (105) of section 65 of the
Finance Act, provided by the provider of taxable service” shall be substituted
with effect from the 1st day of March, 2008.
3. In rule 3 of the said rules,-
(i) in sub-rule (4), after the third proviso, the following proviso shall be
inserted, with effect from the 1st day of March, 2008, namely:-
“Provided also that the CENVAT credit of any duty specified in sub-rule (1),
except the National Calamity Contingent duty in item (v) thereof, shall not be
utilized for payment of the said National Calamity Contingent duty on goods
falling under tariff items 8517 12 10 and 8517 12 90 respectively of the First
Schedule of the Central Excise Tariff:”;
(ii) in sub-rule (5),
(a) in the first proviso , after the words “where any inputs”, the words “ or
capital goods” shall be inserted;
(b) second proviso shall be omitted.
4. In rule 6 of the said rules,-
(a) in sub-rule (1) for the words, “exempted goods or exempted services”, the
words, “exempted goods or for provision of exempted services” shall be
substituted;
(b) for sub-rule (3), the following sub-rules shall be substituted, namely,-
“(3) Notwithstanding anything contained in sub-rules (1) and (2), the
manufacturer of goods or the provider of output service, opting not to maintain
separate accounts, shall follow either of the following options, as applicable
to him, namely:-
(i) the manufacturer of goods shall pay an amount equal to ten per cent. of
value of the exempted goods and the provider of output service shall pay an
amount equal to eight per cent. of value of the exempted services; or
(ii) the manufacturer of goods or the provider of output service shall pay an
amount equivalent to the CENVAT credit attributable to inputs and input services
used in, or in relation to, the manufacture of exempted goods or for provision
of exempted services subject to the conditions and procedure specified in
sub-rule (3A).
Explanation I.- If the manufacturer of goods or the provider of output service,
avails any of the option under this sub-rule, he shall exercise such option for
all exempted goods manufactured by him or, as the case may be, all exempted
services provided by him, and such option shall not be withdrawn during the
remaining part of the financial year.
Explanation II.-For removal of doubt, it is hereby clarified that the credit
shall not be allowed on inputs and input services used exclusively for the
manufacture of exempted goods or provision of exempted service.
(3A) For determination and payment of amount payable under clause (ii) of
sub-rule (3), the manufacturer of goods or the provider of output service shall
follow the following procedure and conditions, namely:-
(a) while exercising this option, the manufacturer of goods or the provider of
output service shall intimate in writing to the Superintendent of Central Excise
giving the following particulars, namely:-
(i) name, address and registration No. of the manufacturer of goods or provider
of output service;
(ii) date from which the option under this clause is exercised or proposed to be
exercised;
(iii) description of dutiable goods or taxable services;
(iv) description of exempted goods or exempted services;
(v) CENVAT credit of inputs and input services lying in balance as on the date
of exercising the option under this condition;
(b) the manufacturer of goods or the provider of output service shall, determine
and pay, provisionally, for every month,-
(i) the amount equivalent to CENVAT credit attributable to inputs used in or in
relation to manufacture of exempted goods, denoted as A;
(ii) the amount of CENVAT credit attributable to inputs used for provision of
exempted services (provisional)= (B/C) multiplied by D, where B denotes the
total value of exempted services provided during the preceding financial year, C
denotes the total value of dutiable goods manufactured and removed plus the
total value of taxable services provided plus the total value of exempted
services provided, during the preceding financial year and D denotes total
CENVAT credit taken on inputs during the month minus A;
(iii) the amount attributable to input services used in or in relation to
manufacture of exempted goods or provision of exempted services (provisional) =
(E/F) multiplied by G, where E denotes total value of exempted services provided
plus the total value of exempted goods manufactured and removed during the
preceding financial year, F denotes total value of taxable and exempted services
provided, and total value of dutiable and exempted goods manufactured and
removed, during the preceding financial year, and G denotes total CENVAT credit
taken on input services during the month;
(c) the manufacturer of goods or the provider of output service, shall determine
finally the amount of CENVAT credit attributable to exempted goods and exempted
services for the whole financial year in the following manner, namely:-
(i) the amount of CENVAT credit attributable to inputs used in or in relation to
manufacture of exempted goods, on the basis of total quantity of inputs used in
or in relation to manufacture of said exempted goods, denoted as H;
(ii) the amount of CENVAT credit attributable to inputs used for provision of
exempted services = (J/K) multiplied by L, where J denotes the total value of
exempted services provided during the financial year, K denotes the total value
of dutiable goods manufactured and removed plus the total value of taxable
services provided plus the total value of exempted services provided, during the
financial year and L denotes total CENVAT credit taken on inputs during the
financial year minus H;
(iii) the amount attributable to input services used in or in relation to
manufacture of exempted goods or provision of exempted services = (M/N)
multiplied by P, where L denotes total value of exempted services provided plus
the total value of exempted goods manufactured and removed during the financial
year, M denotes total value of taxable and exempted services provided, and total
value of dutiable and exempted goods manufactured and removed, during the
financial year, and N denotes total CENVAT credit taken on input services during
the financial year;
(d) the manufacturer of goods or the provider of output service, shall pay an
amount equal to the difference between the aggregate amount determined as per
condition (c) and the aggregate amount determined and paid as per condition (b),
on or before the 30th June of the succeeding financial year, where the amount
determined as per condition (c) is more than the amount paid;
(e) the manufacturer of goods or the provider of output service, shall, in
addition to the amount short-paid, be liable to pay interest at the rate of
twenty-four per cent. per annum from the due date, i.e., 30th June till the date
of payment, where the amount short-paid is not paid within the said due date;
(f) where the amount determined as per condition (c) is less than the amount
determined and paid as per condition (b), the said manufacturer of goods or the
provider of output service may adjust the excess amount on his own, by taking
credit of such amount;
(g) the manufacturer of goods or the provider of output service shall intimate
to the jurisdictional Superintendent of Central Excise, within a period of
fifteen days from the date of payment or adjustment, as per condition (d) and
(f) respectively, the following particulars, namely:-
(i) details of CENVAT credit attributable to exempted goods and exempted
services, monthwise, for the whole financial year, determined provisionally as
per condition (b),
(ii) CENVAT credit attributable to exempted goods and exempted services for
the whole financial year, determined as per condition (c),
(iii) amount short paid determined as per condition (d), alongwith the date of
payment of the amount short-paid,
(iv) interest payable and paid, if any, on the amount short-paid, determined
as per condition (e), and
(v) credit taken on account of excess payment, if any, determined as per
condition (f);
(h) where the amount equivalent to CENVAT credit attributable to exempted
goods or exempted services cannot be determined provisionally, as prescribed in
condition (b), due to reasons that no dutiable goods were manufactured and no
taxable service was provided in the preceding financial year, then the
manufacturer of goods or the provider of output service is not required to
determine and pay such amount provisionally for each month, but shall determine
the CENVAT credit attributable to exempted goods or exempted services for the
whole year as prescribed in condition (c) and pay the amount so calculated on or
before 30th June of the succeeding financial year.
(i) where the amount determined under condition (h) is not paid within the said
due date, i.e., the 30th June, the manufacturer of goods or the provider of
output service shall, in addition to the said amount, be liable to pay interest
at the rate of twenty four per cent. per annum from the due date till the date
of payment.
Explanation I.- “Value” for the purpose of sub-rules (3) and (3A) shall have the
same meaning assigned to it under section 67 of the Finance Act, 1994 read with
rules made thereunder or, as the case may be, the value determined under section
4 or 4A of the Central Excise Act, 1944 read with rules made thereunder.
Explanation II.-The amount mentioned in sub-rules (3) and (3A), unless specified
otherwise, shall be paid by the manufacturer of goods or the provider of output
service 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 or the provider of output service
fails to pay the amount payable under sub-rule (3) or as the case may be
sub-rule (3A), it shall be recovered, in the manner as provided in rule 14, for
recovery of CENVAT credit wrongly taken.’.
5. After rule 7 of the said rules, the following rule shall be inserted,
namely:-
“7A. Distribution of credit on inputs by the office or any other premises of
output service provider.-
(1) A provider of output service shall be allowed to take credit on inputs and
capital goods received, on the basis of an invoice or a bill or a challan issued
by an office or premises of the said provider of output service, which receives
invoices, issued in terms of the provisions of the Central Excise Rules, 2002,
towards the purchase of inputs and capital goods.
(2) The provisions of these rules or any other rules made under the Central
Excise Act, 1944, as made applicable to a first stage dealer or a second stage
dealer, shall mutatis mutandis apply to such office or premises of the provider
of output service.”.
6. After rule 15 of the said rules, the following rule shall be inserted with
effect from the 1st day of March, 2008, namely:-
“15A. 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.”.
[F.No. 334/1/2008-TRU]
(S. Bajaj)
Under Secretary to the Government of India
Note.- The principal rules were published in the Gazette of India, Part II, Section 3, sub-section (i) Extraordinary vide notification No. 23/2004-Central Excise (N.T.), dated the 10th September, 2004, G.S.R. 600 (E), dated the 10th September 2004, and last amended by notification No. 39/2007-Central Excise (N.T.) dated the 13th November, 2007, G.S.R. 709(E), dated the 13th November, 2007.
ieport.com - India's Premier portal on Excise matters