CLEARANCE/REMOVAL OF EXCISEABLE GOODS

1. CLEARANCE/REMOVAL OF EXCISEABLE GOODS • INTRODUCTION ‘Clearance’ means removal of excisable goods from the factory. Taxable event for sales tax is sale of goods which may or may not coincide with such removal. As there is difference in time when goods are produced or manufactured and when they are removed, the time lag can be used for illegal removal

2. of excisable goods without payment of duty. To guard against such events, the Central Excise Department has evolved a control mechanism to ensure that from the time of excisable goods are produced till the time they are removed from the place of production on payment of duty, there is no risk of clandestine. The goods are immediately removed after the payment of excise duty. The commissioner can allow duty-paid goods to enter or to be retained in any part of premises of a factory.

3. REMOVAL OF GOODS UNDER EXCISE RULES : The discussion can be divided under following heads: • Self Removal Procedure • Removal of Goods under Bond • Removal from FTZ • Removal of goods under invoice • Removal of inputs and Capital goods under CENVAT • Excise Clearance for Export

4. I. SELF REMOVAL PROCEDURE With the introduction, the assessee are allowed to quantify the duty on the basis of approved classification list and price list and clear the goods on payment of appropriate duty. Following are the steps: 1. He may ensure intimation to the department about Flow Chart of process of manufacture and list of raw materials.

5. 2. Ensure that the finished goods are entered in the production register. He should authenticate the first and last page of register. 3. Invoice should be prepared under Rule 11 it should be in line with purchase order, if any, received from customers. 4. Arrive at assessable value and excise duty liability by applying provisions of Section 4 and C.E. Valuation rules 2000 or MRP based value are fixed under section 3(2). 5. Make removal entry in production register providing information about quantity, value and duty payable.

6. II. REMOVAL OF GOODS UNDER BOND Removal of Goods under Bond is prescribed in erstwhile Chapter X of Central Excise Rules 1944 and hence was popularly called ‘Chapter X Procedure’. This procedure was applicable when concession/remission from excise duty was granted if goods were used for special industrial purposes.

7. CENTRAL EXCISE RULES, 2001 In exercise of the powers conferred by Section 37 of the Central Excise Act, 1944, the Central Government has made following rules, • Application • Application by the manufacturer to obtain the benefit • Procedure to be followed by the manufacturer of the subject goods • Manufacturer to give information regarding receipt of the subject goods and maintain records • Recovery of duty in certain cases

8. III. REMOVAL OF EXCISABLE GOODS BY A UNIT FROM FTZ OR 100% EOU • Where any goods are removed from a unit in a free trade zone or100%. Export oriented unit or a unit in the Special Economic Zone, to domestic tariff area, such removal shall be made under an invoice by the following procedure specified in rule 11. • The unit shall maintain in the form specified by notification by the Board appropriate account relating to production, description of goods, quantity removed, and the duty paid.

9. 3. The unit shall submit a monthly return in the form specified by notification by the Board to the Superintendent of Central Excise, within ten days from the close of the month to which the return relates, in respect of the goods removed to domestic tariff area. 4. Notwithstanding anything contained in sub-rule (1), Commissioner may, in exceptional circumstances, having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer where the goods the made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty.

10. IV. REMOVAL OF GOODS UNDER INVOICE [RULE 11] • No goods shall be removed from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent and in case of cigarettes each such invoice shall also be countersigned by the inspector of Central Excise before these are removed from the factory. • The invoice shall be serially numbered and shall contain the registration number, description, classification, time and date of removal, rate of duty, quantity and value, of goods and the duty payable thereon

11. 3. The invoice shall be prepared by the applicant in the following manner, namely:- • The original copy being marked as ORIGINAL FOR BUYER; • the duplicate copy being marked as DUPLICATE FOR TRANSPORTER. • The triplicate copy being marked as TRIPLICATE FOR ASSESSEE. 4. Only one copy of invoice book shall be in use at a time, unless otherwise allowed by the Assistant Commissioner of Central Excise in the special facts and circumstances of each case.

12. 5. The owner or working partner of the Managing Director or the Company Secretary or any person duly authorized for this purpose shall authenticate each foil of the invoice book, before being bought into use. 6. Before making use of the invoice book the serial numbers of the same shall be intimated to the superintendent of Central Excise having jurisdiction.

13. Credit of duty on goods brought to the factory [RULE 16] Where any goods on which duty had been paid at the time of removal thereof are bought to any factory for being re-made, refined, reconditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilizes this credit according to the said rules.