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Central Excise


Frequently Asked Question (FAQ)
Central Excise

Question: We are leather saddler manufacturer which is a non –excisable and we have paid excise duty on Capital goods. Can we take credit of the excise duty on the capital goods which is used in manufacture of saddler goods?

As per Rule 6 (4) of the Cenvat Credit Rules, no credit can be availed on capital goods used in manufacture of exempted goods or in providing exempted service. Therefore, you are not eligible to take credit of the central excise duty paid by you, being a non –excisable unit.

Question: Does the factory stuffing and sealing facility by Excise is available to a Merchant exporter?

The facility of examination and sealing of export containers by the Central Excise Officers at the place of dispatch is available to both manufacturer- exporters (except when the export is on free Shipping Bill) and merchant-exporter in respect of the goods exported in terms of Rule 18 or 19 of the Central Excise Rules, 2002. Such examination, stuffing and sealing of export containers by the Central Excise Officers are permitted at the factory or warehouse or any other approved premises.







 

 

Question: What is the time limit prescribed in Section 11BB of the Central Excise Act, 1944 for payment of rebate?

A time limit of 90 days has been prescribed under Section 11BB of the Central Excise Act, 1944 as the outer limit after which interest becomes payable to applicant .However CBEC has clarified that there is nothing to prohibit processing & disposal of claims much earlier and asked field formations that all efforts should be made to ensure that the claims of rebate are disposed of within 30 days from the date of receipt of the claim complete in all respect, except those requiring pre-audit. Further, claims requiring pre-audit may also be processed expeditiously.

 

Question: Whether excise relief is available under Rule 19 of Central Excise Rule for goods exported to Nepal in Indian Rupee?

CBEC has  clarified that exports under claim of rebate under amended Notifications No. 19/2004-CE(NT)dated 6.9.2004 or under bond in terms of amended Notification No. 42/2001-CE(NT) dated 26.6.2001 are to be permitted even when the export proceeds are paid in Indian Rupees. Neither Rule 18 or Rule 19 of Central Excise Rules, 2002, nor the above mentioned notifications make any differentiation on the basis of mode of payment of currency for exports. Therefore, exports to Nepal will get excise relief irrespective of whether the payments are made in Indian currency or foreign convertible currency as long as they are in accordance with applicable RBI guidelines.

Question: What is the method through which I have to pay excise duty on transfer of a capital goods and computer on which I availed CENVAT?

As per Rule 5A of the CENVAT Credit Rules, 2004, If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-

(a) for computers and computer peripherals:

for each quarter in the first year @ 10%      

for each quarter in the second year @ 8%

for each quarter in the third year @ 5%

for each quarter in the fourth and fifth year @ 1%

 
for capital goods, other than computers and computer peripherals @ 2.5% for each quarter:

Providedthat if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

(b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.”

 





 

 

Question: What is the excise procedure to be followed for setting up a 100%& EOU?

On obtaining Letter of Permission from the Development Commissioner, a manufacturer is required to approach the Commissioner of Central Excise for declaration of the place as a warehousing station under Section 9 of the Customs Act. Thereafter, the manufacturer is required to obtain private bonded warehouse licence under Section 58 of the Customs Act and permission to manufacture goods under Section 65 of the Customs Act from the jurisdictional Deputy/Assistant Commissioner.






 

 

Question: What formality of Customs is to be fulfilled at the time of export from the factory by an excisable unit?

The excisable unit is required to inform to the Superintendent/ Inspector in the Range Office 24 hours in advance about the proposed consignment of export. The Central Excise officer remains present while stuffing the goods in the container. After completion of the stuffing, the container is sealed with the Central Excise seal in presence of the said officer. Necessary documents such as ARE-1, invoice, packing list are also signed by the said officer. Self-sealing facility is also available under which the unit himself stuffs the container and take clearance thereof.







 

 


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