central exise duty

ITT PROJECT ON

CENTRAL EXISE DUTYSubmitted by:- Devendra parasharSubmitted to :- mr. Anil kumar sharma

THE LAW OF CENTRAL EXCISE IS GOVERND BY THE FOLLOWING :-

THE CENTRAL EXCISE ACT, 1944 THE CENTRAL EXCISE TARIFF ACT, 1985 CENTRAL EXCISE RULES, 2002 CENVAT CREDIT RULES, 2004 CENTRAL EXCISE VALUATION RULES, 2000

HAND SHAKE WITH EXCISETHE CENTRAL EXCISE ACT 1944

PreambleAn act to consolidate and amend law relating to central duties of excise.

AnalysisThis act was consolidating multiple acts were earlier prevailing.

SECTION 1: TITLE, EXTENT & COMMENCMENT

This act may be called CEA, 1944. It extends to whole of India.

TYPES OF EXCISE DUTIES 1.Basic duty of central

excise:-This duty is levied at the rates specified in the First schedule to Central Excise Tariff Act 1985.

2. Specific duty of excise:-

Some commodities like pan masala and cars have special excise duties levied on them .These items are covered under in schedule II to the Central Excise Tariff

3.Education cess on excise duty:-Education cess is a duty of excise that has to be calculated on the aggregate of all duties of excise ,including special excise duty or any other duty of excise.

4.Excise duty on clearances by 100 % EOUs :-

100 per cent Export oriented Units are expected to export all their production .However ,if they clear their final product in the domestic tariff area the rate of excise duty will be equal to that of the customs duty on like article imported in India.

TAXABLE EVENT FOR CENTRAL EXISE DUTY:-

• A duty of excise to be called central value added tax (CENVAT)

• On all EXCISEABLE GOODS which are PRODUCED OR MANUFACTURED IN INDIA

• Excluding goods produced or manufactured in special economic zones

• At the rates set forth in the FIRST SCHDULE to the CETA, 1985.

Conditions of “5m”:- To levy central excise duty condition of 5m must be

fulfilled

5M

MENTIONED: GOODS MUST BE MENTIONED IN CETA , 1985MOVABLE: GOODS MUST BE MOVABLE

MARKETABLE: GOODS MUST BE MARKETABLE

MANUFACTURE: GODDS MUST BE MANUFACTURED OR PRODUCED

MOTHERLAND: GOODS MUST BE MANUFACTURED OR PRODUCED AT MOTHERLAND i.e. INDIA

WHO IS LIABLE TO PAY EXCISE DUTY ?

The central excise duty is a tax on manufacture or production of goods.

The liability to pay excise duty lies on manufacturer or the warehouse keeper.

MEANING OF MANUFACTURER

“Manufacturer” shall be construed accordingly and shall include- Not only a person who employs hired labor in the

production Manufacturer of excisable goods But also any person who engages in their production

or manufacture on his own account Case laws- m.m khambatwala (sc), cibatul Ltd. (sc)

CENTRAL EXCISE

RULES, 2002

CENTRAL EXCISE RULES, 2002

Procedural aspects(Normal)

Admin aspect Spcl-cases (procedure)

Rule 9 - RegistrationRule 10 - Daily Stock AccountRule 11 - Goods to be remove invoiceRule 12 - Filing of excise return

Rule 16 - Treatment of sales returnRule 18 - Export under rebate claimRule 19 - Export under bond/ letter of undertakingRule 20 - WarehousingRule 21 - Remission of ED

Rule 4 - ED is payable on removalRule 5 - Date for determination of dutyRule 6 - Self assessment of duty Rule 7 - Provisional assessment Rule 8 - Payment of EDRule 15 - Compound levy scheme

RULE 4 & 5WHO WHEN

RELEVENT DATE

A. Manufacturer

B. W/H keeper

C. Buyer (only in case of malasis )

A. Removal from factory

B. Removal from W/H.

C. Receipt in his factory.

A. Date of removal from factory

B. Date of removal from W/H

C. Date of receipt in his factory

RULE 6 RULE 6:- The assessee shall himself assess the duty payable on any excisable goods on removal. provided that in case of cigarettes, the superintendent or inspector shall assess the duty payable before removal by the assessee.

RULE 7 : PROVISIONAL ASSESSMENT

Applicable when assessee unable to determine value OR rate of duty

Apply to AC/DC AND execute the bond by filing form no. B2

AC/DC may order allowing payment of duty on provisional basis as specified by him

UNDERSTAND THIS FROM EXAMPLE IN NEXT SLIDE . . .

EG:- IF BUYER PURCHASES UNIT EXCEED 10000 IN A YEAR THE RATE PER UNIT WILL BE ₹ 80,OTHERWISE SALE PRICE OF ₹ 100 WILL BE APPLIED.

Apply to AC/DC for provisional assessment + execute the bond (FORM NO. B2)

If previously assessed @ ₹ 100 If previously assessed @ ₹ 80

Finalize @ ₹ 100 Finalize @ ₹ 80 Finalize @ ₹ 100 Finalize @ ₹ 80

Nothing to do because previously assessed @ ₹ 100 & finalize at same

Refund with interest @ 6%p.a( int. on refund eliminated by F.A. 2013)Subject to unjust enrichment

Demand + interest @ 18% p.a

Nothing to do because previously assessed @ ₹ 80 & finalize at same

WITH IN 6 MONTHS

RULE 8: MANNER OF PAYMENT1. In case of non-SSI: • the duty on goods removed from factory or warehouse during calender month shall be paid by the 5th day of the following month. • provided that in case of goods removed during the march, duty shall be paid by 31st march. 2. In case of SSI: • where an assessee is eligible to avail SSI exemption in a financial year • the duty on goods cleared during a quarter shall be paid by the.

6th of month, if duty is deposited electronically through internet banking and

5th of the month, in any other case following that quarter. Except in case of goods removed during the quarter January to march

for which duty shall be paid by the 31st march.

E-payment: provided further that an assessee, who has paid duty of ₹ 10 lakhs or more including the amount of CCR, in preceding financial year, shall deposit the duty electronically through internet banking .

RULE 8 & 12: MANNER OF PAYMENT & FILLING OF RETURN

S.S.I NON S.S.I

PAYMENT: quarterly 5th/ 6th day of next month after ending quarter.

RETURN: quarterly 10th day of next month after ending quarter.

PAYMENT: monthly 5th/6th day of next month.

RETURN: monthly 10th day of next month.

FOR QUARTER/ MONTH ENDED ON 31ST MARCH : 31ST MARCH

RULE 10: DAILY STOCK ACCOUNT1. Every assessee shall maintain proper records, on a daily basis, in a legible manner

indicating the particulars regarding description of goods produced or manufactured Opening balance Quantity produced or manufactured Quantity removed Inventory of goods Assessable value The amount of duty payable and Particulars regarding amount of duty actually paid.

2. Authentication: The first page and the last page of such account book shall be duly authenticated by the manufacturer or his authorized agent.

3. Preservation of records: All such records shall be preserved for a period of five years immediately after after the financial year to which such records pertain.

VALUATION OF GOODS SEC. 4 & CEVR, 2000

SECTION 4: VALUATION OF EXCISEABLE GOODS FOR THE PURPOSE OF CHARGING DUTY:-

1. Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then on each removal of goods, such value shall:a) Be the transaction value – in a case where

• The goods are sold by the assessee • For delivery at the place of removal • The assessee and buyer of goods are not related and• The price is sole consideration for sale

b) Be the value determined in such a manner as may be prescribed in ANY OTHER CASE(including where goods are not sold).

2. The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed u/s 3(2).

CENTRAL EXCISE VALUATION RULES, 2000

CENTRAL EXCISE VALUATION RULES, 2000:

RULE 1: TITLE

RULE 2: DEFINITIONS

RULE 3: APPLICABILITY OF RULES

RULE4: FREE SAMPLES – The value of the excisable goods shall be based on the value of such goods sold by the assessee at any other time nearest to time of the removal of goods under assessment.

• But, if necessary adjustment can be made on account of the difference in the dates of removal of such goods and of the excisable goods under assessment.

RULE 5: PLACE OF DELEVERY DIFFFRENT FROM PLACE OF REMOVAL

RULE 6: VALUATION OF ADDITIONAL CONSIDERATION

RULE 7: VALUATION OF DEOPOT SELS

RULE 8: VALUATION OF CAPTIVE CONSUMPTION

RULE 9: VALUATION OF SALES TO RELATED PERSON

RULE 10: SALE TO INTER-CONNECTED UNDERTAKING

RULE 10A: GODDS MANUFACTURED BY JOB-WORKER

RULE 11: BEST JUDGEMENT VALUATION

VALUTION OF GOODS

Specific duty based on measurement like weight, volume, length etc. Like cigarettes, cement

Compounded levy Scheme.Duty = Amt. fixed per month or qtr. orAnnum based on production capacity.

Duties AD valoremED= VALUE*ROD

Specific duty