central excise by prof pravin mahamuni
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Presented by
Prof Pravin N MahamuniMBA (Finance & Marketing) PhD (Pursuing)
CENTRAL EXCISE
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BASIC CONCEPT Two types of taxes;Direct taxes collected by the government directly from the tax payerthrough levies such as income tax and wealth tax.Indirect taxes collected indirectly as a part of prices of goods and serviceson which these are levied. In our country these comprise
of excise duty, sales tax, customs duty and value added tax.Governments RevenueDirect Tax 30%Indirect Tax 70%
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What is meant by Tax & Duty?Duty is levied on goods
Tax is levied on other than goods
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INDIRECT TAXCENTRAL EXCISE
CUSTOMS VAT and SERVICE TAX
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Contd It is an indirect tax paid by the manufacturer , whopasses its incidence to the customers.
Excise Duty is levied the moment the process ofmanufacture is complete .
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Objectives of Central Excise Act, 19441. To collect excise duty on manufactured goods more
conveniently
2. To reduce collection costs3. To control wasteful expenditures4. To avoid tax evasion by appropriate control measures5. To promote industrial growth in backward areas6. To support local industries7. To collect high revenues
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WHAT IS EXCISE DUTY? Excise is derived from the Latin word Excisum . According to the Federal Court and Privy Council: a tax attracted by the event of manufacture but collected at some convenient stage which may be after the said event , which is only for administrative convenience[Province of Madras v. Boddu Paidanna & Sons 1978 (2)E.L.T. J272].
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Contd It is a duty levied upon
goods manufactured andnot upon sales or the proceeds of sale of goods [Council v. Province of Madras, 1978 (2) E.L.T. J28].
Therefore the duty of excise is levied on a manufactureror producer in respect of the commodities produced ormanufactured by him.
It is a tax upon manufacture of goods and not upon sales or
proceeds of sale of goods .Duty of excise has been renamed as Central Value AddedTax (CENVAT). CENVAT includes duty, duties duty ofexcise or duties of excise.
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CONSTITUTIONAL BACKGROUND Any duty, tax etc. should be in accordance with the Constitution of
India .The levy of excise duty on goods manufactured or produced in India is interms of Entry 84 of the Union List of the VII Schedule to theConstitution of India empowers the Parliament to levy excise duty ontobacco & other goods manufacture or produced in India
except:a. Alcoholic liquor for human consumptionb. Opiumc. Indian hemp andd. Other narcotic drugs & narcotic
where the State Government has the power to levy excise duty.However, in case of medicinal & toilet preparations containingalcohol or opium, Indian hemp & other narcotic drugs, the CentralGovernment has the power to levy excise duty.
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HISTORY OF CENTRAL EXCISE LAW Prior to 1944 there were 16 individual Acts which leviedexcise duty.Each such act dealt with one or same type ofcommodities. All these acts were consolidated and a consolidating Act was passed in 1944 called as Central Excises andSalt Act, 1944 which came into effect from 28thFebruary 1944.
In 1996 the Act was renamed as Central Excise Act,1944.The Central Excise Act, 1944 (originally CentralExcises and Salt Act, 1944 ) and Rules framed there
under came into force on 28th February, 1944.Prof Pravin N Mahamuni 11
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Contd
The Act applies to the whole of India .India includes Indian territorial waters .Indian territorial waters extend upto 12 nautical milesfrom the Indian land mass.
It also extends to areas designated in the ContinentalShelf and Exclusive Economic Zone of India.The exclusive economic zone extends upto 200nautical miles inside the sea from base line.Though originally the Act did not apply to the Stateof Jammu and Kashmir, its application was extendedto that State since the enactment of Taxation Laws(Extension to Jammu & Kashmir) Act, 1954.
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EXCISE DUTY LIBILITY Chapter II of the Central Excise Act, 1944 deals withlevy and collection of the duty.This chapter contains sections 3, 4 & 4A.Section 3 is the charging section ,section 4 provides for the method of valuation ofexcisable goods and section 4A deals with valuationbased on maximum retail price (MRP).Basic excise duty is leviedu/s 3 of Central Excise Act, 1944at rate provided by First & Second Schedule to CentralExcise Tariff Act (CETA), 1985.
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Basic condition for levy of excise duty
[Charging Section 3(1)]
All of the following conditions are required to fulfill in
order to levy of excise duty.
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As per section 3There is no levy of excise duty on goods produced ormanufactured in Special Economic Zone (SEZ).Goods cleared from 100% EOU are liable to excise
duty and the method of computation is different. SEZ has the meaning assigned to it in Section 2(za) ofthe SEZ Act, 2005. All excisable goods other than salt , which areproduced or manufactured in India, would subject toexcise duty at the rate specified in the First andSecond Schedule to the CETA, 1985.
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Contd Duty is payable bythe manufacturer or producer of excisable goods .
In case where goods are allowed to be stored in a warehousewithout the payment of duty,the duty liability is of the person who stores the goods .Rate of duty is as applicable on date of removal i.e.clearance from factory.
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Contd Goods have to be classified and valued in the state in which the goods are removed from the factory . Any further processing done afterwards is not relevant.Duty liability arises even when goods are not sold or free replacementsare given during warranty period .
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Contd Duty is payable even whennot collected from consumers .Duty is payable even if duty was paid on rawmaterials.Duty can be levied on Govt. undertakings .Duty is considered as a
manufacturing expense andis included as an element of cost for inventory valuation, like other manufacturing expenses.
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Definitions
i. Goods,ii. Manufacture,iii. Excisable goods .
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GOODS
The word goods has not been defined in the CentralExcise Act.The word goods is defined in Article 366(12) of theConstitution of India as
goods include all materials,
commodities and articles.
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Contd As per judicial interpretation for the purpose of levy ofexcise duty, an article must specify two fundamentalrequirements of the term goods
it must be moveable andit must be
marketable
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Concept of Moveable In Union of India Vs. Delhi Cloth Mills (1977 ) ELT J-199 and inSouth Bihar Sugar Mills Vs. Union of India (1978 ) ELT J-336,
The Supreme Court enunciated the principal that to be calledgoods,
the articles must be such as are capable of beingbought and sold in the market.
the articles must be something, which can
ordinarily come or can be brought to the marketto be bought and sold.
As opposed to moveable goods, immoveable goods like propertycannot be brought to the market to be sold.
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Contd Under section 3 (36) of the General Clauses Act of1897,moveable goods mean property of every description exceptimmoveable property.
Section 3(26) of the General Clauses Act, 1897 definesthe term immovable property as:immoveable property shall include land, benefits to ariseout of land, and things attached to the earth, or permanently fastened to anything attached to the earth.
Thus excise duty cannot be levied on immoveable goodsand property. There are several case law on this aspect andthey are discussed subsequently in the section Dutiabilityof Site Activities.
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Deemed MarketabilityGoods includes any article, material or substance which is capable of being brought & sold
for consideration &such article shall be deemed to be marketable.
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Deemed SalesThose which are not really sales bur have been sales.
E.g. Leasing & hire purchase transaction, Work Contract
WHYYY???Transfer of right
to use goodsare instance of deemed sales
that are tax under
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EXCISABLE GOODS [Sec. 2(d)]
Excisable goodsmeans goods specified in the Schedule to theCentral Excise Tariff Act, 1985 as being subject to aduty of excise and includes salt.
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MANUFACTURE Manufacture derived from Latin word
Manu means handfacer means to make
The word manufacture meantthe making of anything by hand but over the periodof timeit also includesmaking of any article or material by the applicationof physical labor or mechanical power
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Section 2(f) Manufacture includes any process ,i. incidental and ancillary to the completion of a
manufactured product; andii. which is specified in relation to any goods in the
Section or Chapter Notes of the Schedule of theCentral Excise Tariff Act, 1985 as amounting tomanufacture; or
iii. which, in relation to the goods specified in the ThirdSchedule , involves packing or repacking of such
goods in a unit container or l abelin g or re-labeling ofcontainers including the declaration or alteration ofretail sale price on it or adoption of any othertreatment on the goods to render the productmarketable to the consumer
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Manufacturer means:
Manufacturer as specified in various Court decisioni.e. new and identifiable product having a distinctionname, character or use must emerge or
Deemed Manufacturer: e.g. Manufacture of table
from wood, conversion of pulp into base paper,conversion of sugarcane to sugar, etc.
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Contd The term manufacturer shall be construedaccordingly and shall includenot only a person who employs hired labour in the
production or manufacture of excisable goods, butalso any person who engages in their productionor manufacture on his own account.
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CASE: Delhi Cloths & General Mills Co Ltd Manufacturer impliesthe change ,
but every change is not manufacture and
yet every change of an article is the result oftreatment, labor and manipulations.
But something more is necessary and there must betransformation;
a new and different article must emerge havingdistinctive name, character or use.
Contd
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In simple words..a person engaged in the manufacture or production of goods
on behalf of principal manufacturer,
from any inputs or goods supplied by the said
principal or manufacturer or by any other personauthorized by him
Contd
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Contd
Job worker need not register with the Department ofCentral Excise.He need not maintain records as required by the Act. Job worker is not required to pay duty.However, if the process amounts to manufacture, he
can pay duty and this duty paid by job worker willbe available as a credit to the manufacturer whohas sent material for job work.
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CLASSIFICATION OF GOODS WHY REQUIRED?????
thousands of varieties of manufactured goods andall goods cannot carry the same rate or amount of duty
not possible to identify all products individuallyto identify the numerous products through groups andsub-groups and thento decide the rate of duty .
This is called Classification of products , which means determining of heading or sub-headingunder which the particular product will be covered.
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Important ReasonsThe rate of duty applicable to a commodity is basedon the tariff entry.
Exemption notifications are generally based on thetariff entry.
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DETERMINATION OF TARIFF HEADINGSCentral Excise Tariff has four columns -
1) Heading number (4 digit )2) Sub-heading number (and 2 more digits are added whenever required)3) Description of goods4) Rate of Duty
Rules for Interpretation of Schedule are given in the Tariff
itself. These are termed as General Interpretative Rules(GIR) . These rules are briefly explained in following slides-
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General Interpretative Rules (GIR) Rule 1: Classification to be as per terms of heading and section/chapter notes
Rule 2 (a) Reference to an article, to include reference to that article incomplete/unfinished orunassembled/disassembled(b) Reference to material/substance, to include reference to mixtures or combinationsof that material/substanceRule 3: Classification when goods classifiable under two or more headings 3(a) Specific heading to prevail over general 3(b) Classification as if goods consisted material/components, which gives themessential character 3(c) Later the better maximRule 4: Akin RuleRule 5: Additional provisions 5(a) Specific cases to be classified with article with which they are normally sold 5(b) Packing material/containers presented to be classified with the goods, if they arenormally used for packing of such goodsRule 6: Classification in sub-headings to be done on the understanding that sub-headings at the same level are comparableProf Pravin N Mahamuni 47
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Rule 1: Classification to be as per terms of headingand section/chapter notes
The titles of Sections and Chapters are provided forease of reference only ; for legal purposes, classificationshall be determined according to the terms of theheadings and any relative Section or Chapter Notes and,
provided such headings or Notes do not otherwise require,according to the provisions hereinafter contained.Example: In Chapter 31 , the notes provide that certainHeadings viz. 3102, 3103 and 3104 comprise within themonly specified goods mentioned therein. Consequently,these headings cannot be extended to include goods whichotherwise might fall there by reason of Rule 2(b).
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Rule 2(b) Reference to material/substance, to include reference tomixtures or combinations of that material/substance
Any reference in a heading toa material or a substance
shallbe taken to include a reference to mixtures or combinationsof that material or substance with other materials orsubstances. Any reference to goods of a given material orsubstance shall be taken to include a reference to goodsconsisting wholly or partly of such material or substance.
Examples: The term natural rubber will cover mixture of natural rubber andsynthetic rubber also. (i.e. mixture or combination of thatmaterial with other material). Just as a rubber could cover synthetic rubber, also a rubber sheetwould cover a sheet made up of a mixture of natural andsynthetic rubber. (i.e. goods consentingly wholly or partly of
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Rule 3: Classification when goods classifiable under two
or more headings When by application of sub-rule (b) of rule 2 or for anyother reason, goods are prima facie classifiable undertwo or more headings, classification shall be affectedas given in rule 3(a), 3(b) or 3(c).
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Rule 3 (c) Later the better maxim When goods cannot be classified by reference to (a) or (b),they shall be classified under the heading which occurslast in the numerical order among those which equallymerit consideration .Example: Consider, the case of conveyor belting used in thecolliery. The top layer is vulcanized rubber as coal has atendency to ignite and burn of its on, the central layer is that oftextiles which gives strength and the bottom level is of plasticwhich is friction free to move on rollers. The following headingsare relevant: 4010 Conveyor or transmission belting 5910 transmission or conveyor belts or belting of the textilematerial, whether or not reinforced with metal or othermaterial. Even through of the above headings is equally specific, byvirtue of rule 3(c), last heading 5910 will be the appropriateheading for classification.
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Rule 4: Akin RuleGoods which cannot be classified in accordance with theabove rules shall be classified under the headingappropriate to the goods to which they are most akin.
Example: Consider plastic films used to filter or remove glare of the sunlight, pasted on a car glass windows, window pens etc. there is no specific entry appropriate to the goods.However, considered the following tariff entry: 3925 30 00 Builders ware plastics, not elsewhere specified- shutters, blinds (including Venetian blinds). Even though this is not a builders ware of plastics, since it ismost akin to the plastic blinds , it will appropriately beclassified under the above heading.
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Rule 5: Additional provisions In addition to the foregoing provisions, thefollowing rules shall apply in respect of the goodsreferred to therein:
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Rule 5 (b) Packing material/containers presented to be classifiedwith the goods, if they are normally used for packing of such goods
Subject to the provisions of (a), packing materials andpacking containers presented with the goods thereinshall be classified with the goods if they are of a kindnormally used for packing such goods.However, this provision does not apply when suchpacking materials or packing containers are clearlysuitable for repetitive use.
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Rule 6: Classification in sub-headings to be done on theunderstanding that sub-headings at the same level are comparable
For legal purposes,the classification of goods in the sub-headings of aheading shall be determined according to the termsof those sub-headings and any related sub-heading Notes and,mutatis mutandis , to the above rules, on theunderstanding that only subheadings at the same
level are comparable.For the purposes of this rule the relative Section andChapter Notes also apply, unless the context otherwiserequires.
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VALUATION
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Basis of payment of Excise Duty As per the Central Excise Tariff Act 1985 , excise duty is payable onone of the following basis -Specific duty ; based on some measure like weight, volume, length,etc.Duty based on value ( ad valorem duty ) i.e. fixed percentage of
Tariff Value fixed under section 3(2) of the Central Excise Act,1944;Transaction value determined under section 4 of the CentralExcise Act, 1944; or
Retail Sales Price under section 4A of the Central Excise Act,1944;Duty based on capacity of production (Section 3A of the CentralExcise Act, 1944).Compounded Levy scheme (Rule 15 of the Central Excise Rules,2002). Prof Pravin N Mahamuni 61
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TRANSACTION VALUESection 4(3)(d)Transaction value includesreceipts/recoveries or charges incurred orexpenses provided for in connection withthe manufacturing,marketing,selling
of the excisable goodsto be part of the price payable for the goods sold.
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Contd Inclusions in Transaction Value
Packing chargesDesign and Engineering charges
Consultancy charges relating to manufacturingCompulsory after Sales Service / service in warrantyperiodPre-delivery inspection charges for vehiclesLoading and handling charges within the factoryRoyalty charged in franchise agreement
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Contd Exclusions from Transaction Value
Trade DiscountsOutward handling, freight and transit insurance
chargesNotional Interest on security deposit / advancesInstallation and Erection expensesInterest on ReceivablesBank charges for collection of sale proceeds
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Contd The term place of removal has been recentlyredefined to include
depot, premises of consignment agent etc.
If, therefore, the transaction value is with reference todelivery at the time and place or removal ,
such transaction value will be the assessable value .
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Section 3
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Levy Collection
Produced ormanufactured in
India
Produced ormanufactured
goods
Excisablegoods
Goods As prescribed inrule 4,5..27
DutyExempted SSI
ValueRate
Specific Duty Ad-valorem
Transaction ValueMRPTariff Value
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SELF REMOVAL PROCEDURESelf-Removal Procedure- Applicable to all other goodsproduced or manufactured within the country.
Under this system, the assessee himself determines the dutyliability on the goods and clears the goods .
Today, except cigarettes which is still under physicalcontrol
all other products fall under the self-removal procedureThe manufacturers working under Self-Removing Procedurecan remove the excisable goods by following, the undermentioned procedure -
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Contd 1. The manufacturer may ensure that the goods, which are sought to
be removed , have been duly intimated to the department providing the process flow chart of manufacture as well as listof critical raw materials .
2.He shall ensure that the finished goods are all duly entered in theproduction register daily . The manufacturer shouldauthenticate the first and last pages of this register. (This wascalled the RG-I register earlier).
3. The invoice raised should be in line with the purchase order ifany, received from the customer. Care is to be exercised incalculations in the invoice.
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4. The assessable value (whether cum-duty price or otherwise) is
to be arrived at accurately by applying section 4 read withCentral Excise Valuation Rules, 2000. If the value is based onMRP or Tariff Value fixed under section 3(2) the same may beapplied.
5. He shall prepare an invoice under Rule 11 and calculate theassessable value and Excise duty payable.
6. He shall make the removal entry in production registerproviding details of value, quantity and duty payable .
7. It is to be ensured that the person / carrier who/ which carries thegoods is provided with " duplicate for transporter" copy ofinvoice.
Contd
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8. He shall ensure that at the end of the month (1st to 30th ) he
debits the duty payable in the Cenvat Credit a/c and if thebalance is not sufficient, pay through the Personal Ledger Account (PLA) by the 5th of the next month . For the month of March, payment will be made by the end of that month itself.
9. The units claiming 8/2003 (SSI Exemption ) are required to paythe monthly duty by the 15th of the subsequent month . Herealso, for the month of March payment is to be made by the endof that month itself .
10. It is hereby clarified that the duty liability shall be deemed tohave been discharged only if the amount payable is creditedto the account of the Central Government by the specifieddate . The Board has clarified that the liability would bedischarged only on the date of realization of the cheque and notearlier as per the CBEC Circular No.28/2002 dt. 24.5.2002.
Contd
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MANNER OF PAYMENT OF DUTY [RULE 8]
The sub-rule (1) provides that the duty on the goodsremoved from the factory or the warehouse during themonth shall be paid:
(i) by the 6th day of the following month, if the duty ispaid electronically through internet banking;
(ii) by the 5th day of the following month in any othercase;
(iii) by the 31st day of March in the case of goodsremoved during the month of March.
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E-payment of duty With effect from 01.04.2007, e -payment has beenmade mandatory for payment of duty by all assessees who have paid excise duty of rupees 50 lakh ormore in cash during the preceding financial year.
Contd
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SHOW CAUSE NOTICE (SCN)Excise Officer can ask manufacturer to pay thedifference of duty by issuing a show-cause notice.
After considering the representation from the personconcerned, the Central Excise Officer can determine theamount of duty payable and then the person chargeableto duty has to pay the amount.
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Requirements of Show-cause Notice
SCN to Manufacturer only
Essential details should be given
Penalty or Confiscation must be mentioned if it is proposed
Allegations must be mentioned
Copies of documents to be given
Contd
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ADJUDICATION Adjudicate means to hear or try and decide judicially andadjudication means giving a decision.
Excise authorities are empowered to determineclassification , valuation, refund claims and the tax /duty payable. They are also empowered to grant variouspermissions under rules and impose fines, penalties, etc.this is called departmental adjudication .
Uncontrolled authority may cause great damage to anassessee and hence opportunity of appeal against the orderhas been provided.
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Departmental authorities have original adjudication
powers as follows :
Superintendent - remission of duty for loss of goods up to Rs. 1,000/-
Deputy / Assistant Commissioner - remission of duty for loss of goodsup to Rs. 2,500/- ; issuance of registration certificates; Cenvat credit /duty up to Rs. 5 lakh s.
Joint Commissioner - Cenvat credit / duty above Rs. 5 lakhs and up to
Rs. 20 lakhs; remission of duty for loss of goods up to Rs. 5,000 /;matters related to export under bond or under claim of rebate; loss ofgoods during transit to warehouse without upper monetary limit
Contd
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INTEREST
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INTERESTIf duty is not paid when it ought to have been paid, interest is payableat the rates specified by Central Govt . by notification in officialgazette. Such rate cannot be less than 10% and not more than 36%.
The interest is payable from the 1st day of the month following the monthin which the duty ought to have been paid.
The actual rate of interest is 18% w.e.f 1-4-2011
If assessee pays duty on order or instruction of CBE&C voluntarily within 45days of such order, he is exempted from payment of interest . However, ifhe pays only a part of the amoun t but pays the amount reserving the right to
appeal, the interest is payable from the month following the month in which the duty ought to have been paid.
Relaxation of payment of interest is applicable only when the CBE&Cissues a general order . This relaxation does not apply if assessee pays dutyon receipt of SCN or pays duty on his own.
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PENALTY
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PENALTYThere are 3 types of penalties in Central Excise:
Civil Liability - it will arise when the provisions of the act are violated . Inthis case, the penalty involves confiscation of goods and monetary penalty .It is imposed by Excise Authority as per the provisions of the Central ExciseRules.
Criminal Liability - it involves imposition of fine and imprisonment . It isgranted by Criminal Court or prosecution as per the provisions of the Act.
General Penalty - if goods are removed in contravention of Act , rules ornotification or goods are not accounted for or goods are manufactured, produced
or stored without applying for registration or excise rules and notificationshave been contravened with an intention to evade the duty, general penalty isapplicable.
It includes confiscation of goods and penalty up to duty payable or Rs. 10,000whichever is higher.
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CONFISCATION
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CONFISCATION
Confiscation means the goods become property of Govt .and Govt. can deal with it as it wants . Following can beconfiscated
Contravening goods
Conveyance for transport of goods / smuggled goodsPackages in which contravening excisable goods are packedGoods used for concealing contravening excisable goodsContravening of goods with form changed even if mixed withoutother goods and cannot be separated
Sale proceeds from sale of contravening excisable goods No confiscation of container obtained on hire
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SEIZURESeizure means goods are taken into the custody by thedepartment . The property of goods remains with the owner.
If goods are liable for confiscation , the same can be seizedby Excise officers.
If seized goods are to be confiscated, SCN must be given within 6 months of seizure of goods.
Panchnama must be made for seizure of goods and seizedgoods must either be kept in police station or in thecustody of the Excise Department.
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PAYMENT OF DUTY UNDER PROTEST
Sometimes it happens that the classification ofgoods, Assessable value determined by exciseauthorities in adjudication proceedings, etc. are
not agreeable or acceptable to the assessee. In suchcases, the assessee can file an appeal and in themeanwhile can pay duty under protest .
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The following procedure needs to be followed:
Write a letter to Assistant / Deputy Commissioner stating that he desiredto pay duty under protest and give grounds for paying duty under protest.
Obtain dated acknowledgement which will be proof that assessee has paidduty under protest from that date.
After submission of the aforesaid letter, he can pay duty under protest onlytill his appeal or revision is decided.
An endorsement duty paid under protest should appear on all exciseinvoices or monthly / quarterly return. If lump sum is paid in respect of past
demand, fact of duty payment under protest should be mentioned inPLA(Personal Ledger A/c), Cenvat Credit Account and Daily Stock Account.
As per ER-1 form of monthly/ quarterly return, number of invoices on whichduty is paid under protest should be indicated in the return.
Contd
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REFUND An assessee can claim refund of duty if due to him .Normally refund can be filed for various reasons like -
Excess payment of duty due to mistakeForced by department to pay higher dutyFinalization of provisional assessmentExport under claim of rebateDuty paid under protect / pre-deposit of duty for appeal(appeal decided in favor of assessee)
Refund of Cenvat credit if final product is exportedUnutilized balance in PLA
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APPEALS
Appeal is a remedy available to the aggrieved by thedecision or order passed by the authority, wherein thehigher authority decides about the correctness of the
said decision or order.
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EXCISE AUDIT
Most of factories are under Self Removal Procedure and thereis no physical control over production and clearance of goods.
Assessment is mainly based on returns submitted by assessee.Department has evolved various checks and counter-checks to
ensure that excise duty is not evaded.
For Central Excise purpose, Audit means scrutiny of the recordsof the assesses and the verification of actual process or receipt,storage, production and clearance of goods with a view to check
whether the assessee is paying the Central Excise duty correctlyand is following Central Excise procedures.
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Types of AuditsDepartmental Audit Audit of assessees factory is carried out by visit by audit party
Audit parties visit the factories periodically
Audit parties are functioning under Commissionerate headquarters while some may function at important industrial centers where JointCommissioner or Additional Commissioner has been posted
The Audit Party usually consists of 2 / 3 inspectors and a DeputyOffice Superintendent, headed by Excise Superintendent. AC / DC andsenior officers are associated with the audit of large units.
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Central Excise Revenue Audit (CERA)Comptroller and Auditor General of India also carries out
audits of all assessees. These are called CERA
Audit parties audit the accounts of excise as well as customsassessees
Report of C&AG shall be submitted to the President of India , who causes these to be laid before each House of Parliament .
Frequency of CERA Audits as per the importance they attachand availability of time to CERA audit parties
Assessee is required to produce to audit parties - records, costaudit report and income tax audit report.
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CONCESSION FOR SSI UNITSDuty on manufacture, it is payable even by a small unit
manufacturing goodsGovt.s policy to encourage the growth of small units
It is administratively inconvenient and costl y to collectrevenue from numerous small units
A SSI is a unit having annual turnover less than Rs. 3 Cr.
The SSI unit need not register with any authority.Even a large industry will be eligible for concession if itsannual turnover is less than Rs. 3 Cr
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SSI units have been given three types of exemptions -
SSI Unit can avail full exemption up to Rs. 100 lakhsand pay normal duty thereafter. Such units can availCenvat credit on inputs only after reaching turnover ofRs. 100 lakhs in the financial year.
SSI units intending to avail Cenvat credit on inputs onall its turnover have to pay 60% duty on first 100 lakhsand 100% duty for subsequent clearances.
SSI Unit can also pay full 100% and avail Cenvat credit.
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