[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,
SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification
No.10/2008-Central Excise (N.T)
New Delhi the 1
st
March, 2008,
G.S.R. (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of
1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes
the following rules further to amend the CENVAT Credit Rules, 2004, namely:-
1. (1) These rules may be called the CENVAT Credit (Amendment) Rules, 2008.
(2) Save as otherwise provided in these rules, they shall come into force on the 1
st
day of
April, 2008
2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule
2,-
(i) in clause (l), for the words “clearance of final products from the place of removal”,
the words “clearance of final products, upto the place of removal,” shall be
substituted;
(ii) in clause (p), for the words “any taxable service provided by the provider of
taxable service”, the words “any taxable service, excluding the taxable service
referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act,
provided by the provider of taxable service” shall be substituted with effect from the
1
st
day of March, 2008.
3. In rule 3 of the said rules,-
(i) in sub-rule (4), after the third proviso, the following proviso shall be inserted, with
effect from the 1
st
day of March, 2008, namely:-
“Provided also that the CENVAT credit of any duty specified in sub-rule (1), except
the National Calamity Contingent duty in item (v) thereof, shall not be utilized for
payment of the said National Calamity Contingent duty on goods falling under tariff
items 8517 12 10 and 8517 12 90 respectively of the First Schedule of the Central
Excise Tariff:”;
(ii) in sub-rule (5),
(a) in the first proviso , after the words “where any inputs”, the words “ or capital
goods” shall be inserted;
(b) second proviso shall be omitted.
4. In rule 6 of the said rules,-
(a) in sub-rule (1) for the words, “exempted goods or exempted services”, the
words, “exempted goods or for provision of exempted services” shall be
substituted;
(b) for sub-rule (3), the following sub-rules shall be substituted, namely,-
“(3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of
goods or the provider of output service, opting not to maintain separate accounts, shall
follow either of the following options, as applicable to him, namely:-
(i) the manufacturer of goods shall pay an amount equal to ten per cent. of
value of the exempted goods and the provider of output service shall pay an amount
equal to eight per cent. of value of the exempted services; or
(ii) the manufacturer of goods or the provider of output service shall pay
an amount equivalent to the CENVAT credit attributable to inputs and input
services used in, or in relation to, the manufacture of exempted goods or for provision
of exempted services subject to the conditions and procedure specified
in sub-rule (3A).
Explanation I.- If the manufacturer of goods or the provider of output service, avails any
of the option under this sub-rule, he shall exercise such option for all exempted goods
manufactured by him or, as the case may be, all exempted services provided by him, and
such option shall not be withdrawn during the remaining part of the financial year.
Explanation II.-For removal of doubt, it is hereby clarified that the credit shall not be
allowed on inputs and input services used exclusively for the manufacture of exempted
goods or provision of exempted service.
(3A) For determination and payment of amount payable under clause (ii) of sub-rule (3),
the manufacturer of goods or the provider of output service shall follow the following
procedure and conditions, namely:-
(a) while exercising this option, the manufacturer of goods or the provider of output
service shall intimate in writing to the Superintendent of Central Excise giving the
following particulars, namely:-
(i) name, address and registration No. of the manufacturer of goods or provider of
output service;
(ii) date from which the option under this clause is exercised or proposed to be
exercised;
(iii) description of dutiable goods or taxable services;
(iv) description of exempted goods or exempted services;
(v) CENVAT credit of inputs and input services lying in balance as on the date of
exercising the option under this condition;
(b) the manufacturer of goods or the provider of output service shall, determine and
pay, provisionally, for every month,-
(i) the amount equivalent to CENVAT credit attributable to inputs used in or in
relation to manufacture of exempted goods, denoted as A;
(ii) the amount of CENVAT credit attributable to inputs used for provision of
exempted services (provisional)= (B/C) multiplied by D, where B denotes the
total value of exempted services provided during the preceding financial year, C
denotes the total value of dutiable goods manufactured and removed plus the total
value of taxable services provided plus the total value of exempted services
provided, during the preceding financial year and D denotes total CENVAT credit
taken on inputs during the month minus A;
(iii) the amount attributable to input services used in or in relation to manufacture
of exempted goods or provision of exempted services (provisional) = (E/F)
multiplied by G, where E denotes total value of exempted services provided plus
the total value of exempted goods manufactured and removed during the preceding
financial year, F denotes total value of taxable and exempted services provided,
and total value of dutiable and exempted goods manufactured and removed,
during the preceding financial year, and G denotes total CENVAT credit taken on
input services during the month;
(c) the manufacturer of goods or the provider of output service, shall determine finally
the amount of CENVAT credit attributable to exempted goods and exempted services
for the whole financial year in the following manner, namely:-
(i) the amount of CENVAT credit attributable to inputs used in or in relation to
manufacture of exempted goods, on the basis of total quantity of inputs used in or
in relation to manufacture of said exempted goods, denoted as H;
(ii) the amount of CENVAT credit attributable to inputs used for provision of
exempted services = (J/K) multiplied by L, where J denotes the total value of
exempted services provided during the financial year, K denotes the total value of
dutiable goods manufactured and removed plus the total value of taxable services
provided plus the total value of exempted services provided, during the financial
year and L denotes total CENVAT credit taken on inputs during the financial year
minus H;
(iii) the amount attributable to input services used in or in relation to manufacture
of exempted goods or provision of exempted services = (M/N) multiplied by P,
where L denotes total value of exempted services provided plus the total value of
exempted goods manufactured and removed during the financial year, M denotes
total value of taxable and exempted services provided, and total value of dutiable
and exempted goods manufactured and removed, during the financial year, and N
denotes total CENVAT credit taken on input services during the financial year;
(d) the manufacturer of goods or the provider of output service, shall pay an amount
equal to the difference between the aggregate amount determined as per condition (c) and
the aggregate amount determined and paid as per condition (b), on or before the 30
th
June
of the succeeding financial year, where the amount determined as per condition (c) is
more than the amount paid;
(e) the manufacturer of goods or the provider of output service, shall, in addition to the
amount short-paid, be liable to pay interest at the rate of twenty-four per cent. per annum
from the due date, i.e., 30th June till the date of payment, where the amount short-paid is
not paid within the said due date;
(f) where the amount determined as per condition (c) is less than the amount determined
and paid as per condition (b), the said manufacturer of goods or the provider of output
service may adjust the excess amount on his own, by taking credit of such amount;
(g) the manufacturer of goods or the provider of output service shall intimate to the
jurisdictional Superintendent of Central Excise, within a period of fifteen days from the
date of payment or adjustment, as per condition (d) and (f) respectively, the following
particulars, namely:-
(i) details of CENVAT credit attributable to exempted goods and exempted
services, monthwise, for the whole financial year, determined provisionally
as per condition (b),
(ii) CENVAT credit attributable to exempted goods and exempted services
for the whole financial year, determined as per condition (c),
(iii) amount short paid determined as per condition (d), alongwith the date
of payment of the amount short-paid,
(iv) interest payable and paid, if any, on the amount short-paid, determined
as per condition (e), and
(v) credit taken on account of excess payment, if any, determined as per
condition (f);
(h) where the amount equivalent to CENVAT credit attributable to exempted goods or
exempted services cannot be determined provisionally, as prescribed in condition (b),
due to reasons that no dutiable goods were manufactured and no taxable service was
provided in the preceding financial year, then the manufacturer of goods or the provider
of output service is not required to determine and pay such amount provisionally for each
month, but shall determine the CENVAT credit attributable to exempted goods or
exempted services for the whole year as prescribed in condition (c) and pay the amount
so calculated on or before 30th June of the succeeding financial year.
(i) where the amount determined under condition (h) is not paid within the said due
date, i.e., the 30th June, the manufacturer of goods or the provider of output service
shall, in addition to the said amount, be liable to pay interest at the rate of twenty four
per cent. per annum from the due date till the date of payment.
Explanation I.- “Value” for the purpose of sub-rules (3) and (3A) shall have the same
meaning assigned to it under section 67 of the Finance Act, 1994 read with rules made
thereunder or, as the case may be, the value determined under section 4 or 4A of the
Central Excise Act, 1944 read with rules made thereunder.
Explanation II.-The amount mentioned in sub-rules (3) and (3A), unless specified
otherwise, shall be paid by the manufacturer of goods or the provider of output service by
debiting the CENVAT credit or otherwise on or before the 5th day of the following
month except for the month of March, when such payment shall be made on or before the
31
st
day of the month of March.
Explanation III.- If the manufacturer of goods or the provider of output service fails to
pay the amount payable under sub-rule (3) or as the case may be sub-rule (3A), it shall be
recovered, in the manner as provided in rule 14, for recovery of CENVAT credit wrongly
taken.’.
5. After rule 7 of the said rules, the following rule shall be inserted, namely:-
“7A. Distribution of credit on inputs by the office or any other premises of output
service provider.- (1) A provider of output service shall be allowed to take credit on
inputs and capital goods received, on the basis of an invoice or a bill or a challan
issued by an office or premises of the said provider of output service, which receives
invoices, issued in terms of the provisions of the Central Excise Rules, 2002, towards
the purchase of inputs and capital goods.
(2) The provisions of these rules or any other rules made under the Central Excise
Act, 1944, as made applicable to a first stage dealer or a second stage dealer, shall
mutatis mutandis apply to such office or premises of the provider of output service.”.
6. After rule 15 of the said rules, the following rule shall be inserted with effect from the 1
st
day of March, 2008, namely:-
“15A. General penalty.- Whoever contravenes the provisions of these rules for
which no penalty has been provided in the rules, he shall be liable to a penalty
which may extend to five thousand rupees.”.
[F.No. 334/1/2008-TRU]
(S. Bajaj)
Under Secretary to the Government of India
Note.- The principal rules were published in the Gazette of India, Part II, Section 3, sub-section (i)
Extraordinary vide notification No. 23/2004-Central Excise (N.T.), dated the 10
th
September, 2004,
G.S.R. 600 (E), dated the 10
th
September 2004, and last amended by notification No. 39/2007-Central
Excise (N.T.) dated the 13
th
November, 2007, G.S.R. 709(E), dated the 13th November, 2007.
