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CENTRAL EXCISE. by g. natarajan, advocate swamy associates. MANUFACTURE. Section 2 (f). Deemed Manufacture. Chapter 72 – galvanization. Chapter 26 – conversion of ores into concentrates. Third Schedule. which, in relation to the goods specified in the Third Schedule,
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CENTRAL EXCISE by g. natarajan, advocate swamy associates
MANUFACTURE • Section 2 (f). • Deemed Manufacture. • Chapter 72 – galvanization. • Chapter 26 – conversion of ores into concentrates. • Third Schedule. • which, in relation to the goods specified in the Third Schedule, • involves packing or repacking of such goods in a unit container or • labelling or re-labelling of containers including the declaration or • alteration of retail sale price on it or adoption of any other treatment • on the goods to render the product marketable to the consumer.
MANUFACTURE • UOI Vs Delhi Cloth & General Mills • 1977 (1) ELT J 199 SC. • ED is on manufacture and not on sale. • Goods much be something, which can be bought and sold. • “Manufacture implies a change, but every change is not manufacture and • yet every change of an article is the result of treatment, labour and • manipulation. But something more is necessary and there must be • transformation; a new and different article must emerge having a distinctive • name, character or use.” • 37 B Order No. 58/1/2002 Dt. 15.01.2002.
MANUFACTURE • Ammonia Supply Co Vs CCE • 2001 (131) ELT 626 Tri • Repacking from bulk to retail – tanker to cylinder • is not manufacture. ” • Conybio Healthcare Vs CCE. • 2007 (216) ELT 586 Tri. • Labeling / relabeling and repacking. • CCE Vs Rajpurohit – 2008 (231) ELT 577 SC. • CCE Vs S.R. Tissues – 2005 (186) ELT 385 SC. • Cutting and Slitting – Not manufacture.
VALUATION • Section 4 – Transaction Value. • - in a case where the goods are sold by the assessee, for delivery at the time and • place of the removal, the assessee and the buyer of the goods are not related and • the price is the sole consideration for the sale, be the transaction value. • “transaction value” means the price actually paid or payable for the goods, when sold, • and includes in addition to the amount charged as price, any amount that the buyer • is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, • whether payable at the time of the sale or at any other time, including, but not limited to, • any amount charged for, or to make provision for, advertising or publicity, marketing and • selling organization expenses, storage, outward handling, servicing, warranty, • commission or any other matter; but does not include the amount of duty of excise, • sales tax and other taxes, if any, actually paid or actually payable on such goods.
VALUATION RULES • Rule 4 : Comparable Price. • Story of Physician Samples. • Rule 5 : Freight & Insurance. • Baroda Electric Meters – 1997 (94) ELT 13 SC. • Rule 6 : Additional Consideration. • (Amortisation) • Rule 7 : Depot Clearances. • Rule 8 : Captive consumption. • Rule 9 : Related Persons. • Rule 10 : Interconnected undertakings. • Rule 10 A : Job work. • Rule 11 : Best Judgement.
VALUATION • UOI Vs Bombay Tyre International • 1984 (17) ELT 329 SC • Discounts to be excluded. • Koya & Co Industries (P) Ltd Vs CCE. • 2007 (213) ELT 691 • Pipes sold to to related person – further used in laying – • Value should be cost plus 10 % - Rule 11, 9 and 8.
SECTION 4 A • Notified commodities. • Requirement of MRP under Legal • Metrology Act. • Prescribed abatements. • Industrial / Institutional Consumer. • Multi-piece package / Combination package • Wholesale package. • The ITC Story.
JOB WORK • Who is the manufacturer? • KSEB Vs CCE – 1992 (62) ELT A 52 SC. • Notification 214/86. • Notifications 83 & 84/94. • Rule 4 (5) (a) of CCR, 2004. • Ujagar Prints Case. • Rule 10 A of Valuation Rules. • - If sold by principal. • - If sold through depot. • - If used in further manufacture.
ADJUDICATION AND APPEAL • Normal period Vs Extended Period. • Time limit for adjudication. • Penalties, Interest and Confiscation. • Search and Seizure. • Summons and Statement. • Arrest and Prosecution. • Recovery measures. • Provisional attachment. • Appellate remedies. • Pre deposit. • Settlement Commission. • Compounding Scheme.
LARGEST TAX PAYER UNIT • Eligibility. • Transfer of inputs. • Transferred of manufactured goods. • Transfer of credit.
EXEMPTIONS • End use based exemptions. • Eg. Supplies to defence / SEZ. • Small scale exemption. • Upto Rs.1.5 Crores – Previous year less than Rs.4 crores. • Others brand – No exemption (rural area). • No cenvat credit. • Area based exemption. • (Refund mode / Exemption mode)
MISCELLENEOUS • Self Assessment / Provisional assessment. • Due date for payment of duty and • consequences for failure. • Godrej Hershey Limited Vs CCE. • Refunds. • Exports • - without payment of duty. • - under claim for rebate. • ER1 to ER 7. • Supplementary Invoices. • Section 11D. • Return of goods. • Remission of duty.
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