Excise CenVat Credit Rules

CENVAT Credit Rules, 2004
1. Short title, extent and commencement.- (1) These rules may be called the CENVAT Credit
Rules, 2004.
(2) They extend to the whole of India:
Provided that nothing contained in these rules relating to availment and utilization of credit of
service tax shall apply to the State of Jammu and Kashmir.
(3) They shall come into force from the date of their publication in the Official Gazette.
2. Definitions.- In these rules, unless the context otherwise requires,-
(a) "capital goods" means:-
(A) the following goods, namely:-
(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02
and sub-heading No. 6801.10 of the First Schedule to the Excise Tariff Act;
(ii) pollution control equipment;
(iii) components, spares and accessories of the goods specified at (i) and (ii);
(iv) moulds and dies, jigs and fixtures;
(v) refractories and refractory materials;
(vi) tubes and pipes and fittings thereof; and
(vii) storage tank,
used-
(1) in the factory of the manufacturer of the final products, but does not include any equipment or
appliance used in an office; or
(2) for providing output service;
(B) motor vehicle registered in the name of provider of output service for providing taxable service
as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of
the Finance Act;
(b) "Customs Tariff Act" means the Customs Tariff Act, 1975 (51 of 1975);
(c) "Excise Act" means the Central Excise Act, 1944 (1 of 1944);
(d) "exempted goods" means excisable goods which are exempt from the whole of the duty of
excise leviable thereon, and includes goods which are chargeable to "Nil" rate of duty;
(e) "exempted services" means taxable services which are exempt from the whole of the service
tax leviable thereon, and includes services on which no service tax is leviable under section 66 of
the Finance Act;
(f) "Excise Tariff Act" means the Central Excise Tariff Act, 1985 (5 of 1986);
(g) "Finance Act" means the Finance Act, 1994 (32 of 1994);
(h) "final products" means excisable goods manufactured or produced from input, or using input
service;
(ij) "first stage dealer" means a dealer, who purchases the goods directly from,-
(i) the manufacturer under the cover of an invoice issued in terms of the provisions of Central
Excise Rules, 2002 or from the depot of the said manufacturer, or from premises of the
consignment agent of the said manufacturer or from any other premises from where the goods
are sold by or on behalf of the said manufacturer, under cover of an invoice; or
(ii) an importer or from the depot of an importer or from the premises of the consignment agent of
the importer, under cover of an invoice;
(k) "input" means-
(i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as
petrol, used in or in relation to the manufacture of final products whether directly or indirectly and
whether contained in the final product or not and includes lubricating oils, greases, cutting oils,
coolants, accessories of the final products cleared along with the final product, goods used as
paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in
relation to manufacture of final products or for any other purpose, within the factory of production;
(ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol
and motor vehicles, used for providing any output service;
Explanation 1.- The light diesel oil, high speed diesel oil or motor spirit, commonly known as
petrol, shall not be treated as an input for any purpose whatsoever.
Explanation 2.- Input include goods used in the manufacture of capital goods which are further
used in the factory of the manufacturer;
(l) "input service" means any service,-
(i) used by a provider of taxable service for providing an output service; or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of
final products and clearance of final products from the place of removal,and includes services
used in relation to setting up, modernization, renovation or repairs of a factory, premises of
provider of output service or an office relating to such factory or premises, advertisement or sales
promotion, market research, storage upto the place of removal, procurement of inputs, activities
relating to business, such as accounting, auditing, financing, recruitment and quality control,
coaching and training, computer networking, credit rating, share registry, and security, inward
transportation of inputs or capital goods and outward transportation upto the place of removal;
(m) "input service distributor" means an office of the manufacturer or producer of final products or
provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules,
1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan
for the purposes of distributing the credit of service tax paid on the said services to such
manufacturer or producer or provider, as the case may be;
(n) "job work" means processing or working upon of raw material or semi-finished goods supplied
to the job worker, so as to complete a part or whole of the process resulting in the manufacture or
finishing of an article or any operation which is essential for aforesaid process and the expression
"job worker" shall be construed accordingly;
(na) “manufacturer” or “producer” in relation to articles of jewellery falling under heading 7113 of
the First Schedule to the Excise Tariff Act, includes a person who is liable to pay duty of excise
leviable on such goods under sub-rule (1) of rule 12AA of the Central Excise Rules, 2002;
(o) "notification" means the notification published in the Official Gazette;
(p) "output service" means any taxable service provided by the provider of taxable service, to a
customer, client, subscriber, policy holder or any other person, as the case may be, and the
expressions ‘provider’ and ‘provided’ shall be construed accordingly;
Explanation.- For the removal of doubts it is hereby clarified that if a person liable for paying
service tax does not provide any taxable service or does not manufacture final products, the
service for which he is liable to pay service tax shall be deemed to be the output service.
(q) "person liable for paying service tax" has the meaning as assigned to it in clause (d) of subrule
(1) of rule 2 of the Service Tax Rules, 1994;
(r) "provider of taxable service" include a person liable for paying service tax;
(s) "second stage dealer" means a dealer who purchases the goods from a first stage dealer;
(t) words and expressions used in these rules and not defined but defined in the Excise Act or the
Finance Act shall have the meanings respectively assigned to them in those Acts.
3. CENVAT credit.- (1) A manufacturer or producer of final products or a provider of taxable
service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of -
(i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the
Excise Act;
(ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the
Excise Act;
(iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile
and Textile Articles) Act,1978 ( 40 of 1978);
(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise
(Goods of Special Importance) Act, 1957 ( 58 of 1957);
(v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14
of 2001);
(vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the
Finance (No.2) Act, 2004 (23 of 2004);
(vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty
of excise specified under clauses (i), (ii), (iii), (iv), (v) and (vi);
“(viia) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act,
as substituted by clause 72 of the Finance Bill, 2005, the clause which has, by virtue of
the declaration made in the said Finance Bill under the Provisional Collection of Taxes
Act, 1931 (16 of 1931), the force of law:
Provided that a provider of taxable service shall not be eligible to take credit of such additional
duty;
(viii) the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of
2003);
(ix) the service tax leviable under section 66 of the Finance Act; and
(x) the Education Cess on taxable services leviable under section 91 read with section 95 of the
Finance (No.2) Act, 2004 (23 of 2004),
(xi) the additional duty of excise leviable under clause 85 of the Finance Bill, 2005, the
clause which has, by virtue of the declaration made in the said Finance Bill under the
Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law;
paid on-
(i) any input or capital goods received in the factory of manufacture of final product or premises of
the provider of output service on or after the 10th day of September, 2004; and
(ii) any input service received by the manufacturer of final product or by the provider of output
services on or after the 10th day of September, 2004,including the said duties, or tax, or cess
paid on any input or input service, as the case may be, used in the manufacture of intermediate
products, by a job-worker availing the benefit of exemption specified in the notification of the
Government of India in the Ministry of Finance (Department of Revenue), No. 214/86- Central
Excise, dated the 25th March, 1986, published in the Gazette of India vide number G.S.R. 547
(E), dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the
manufacture of final product, on or after the 10th day of September, 2004.
Explanation.- For the removal of doubts it is clarified that the manufacturer of the final products
and the provider of output service shall be allowed CENVAT credit of additional duty leviable
under section 3 of the Customs Tariff Act on goods falling under heading 9801 of the First
Schedule to the Customs Tariff Act.
(2) Notwithstanding anything contained in sub-rule (1), the manufacturer or producer of final
products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in
process or inputs contained in the final products lying in stock on the date on which any goods
manufactured by the said manufacturer or producer cease to be exempted goods or any goods
become excisable.
(3) Notwithstanding anything contained in sub-rule (1), in relation to a service which ceases to be
an exempted service, the provider of the output service shall be allowed to take CENVAT credit of
the duty paid on the inputs received on and after the 10th day of September, 2004 and lying in
stock on the date on which any service ceases to be an exempted service and used for providing
such service.
(4) The CENVAT credit may be utilized for payment of –
(a) any duty of excise on any final product; or
(b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or
after being partially processed; or
(c) an amount equal to the CENVAT credit taken on capital goods if such capital goods are
removed as such; or
(d) an amount under sub rule (2) of rule 16 of Central Excise Rules, 2002; or
(e) service tax on any output service:
Provided that while paying duty of excise or service tax, as the case may be, the CENVAT credit
shall be utilized only to the extent such credit is available on the last day of the month or quarter,
as the case may be, for payment of duty or tax relating to that month or the quarter, as the case
may be:
Provided further that the CENVAT credit of the duty, or service tax, paid on the inputs, or input
services, used in the manufacture of final products cleared after availing of the exemption under
the following notifications of Government of India in the Ministry of Finance (Department of
Revenue),-
(i) No. 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated 8th July, 1999];
(ii) No. 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated 8th July, 1999];
(iii) No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565 (E), dated the 31st July,
2001];
(iv) No. 56/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 764(E), dated the 14th
November, 2002];
(v) No. 57/2002-Central Excise, dated 14th November, 2002 [G.S.R.. 765(E), dated the 14th
November, 2002];
(vi) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June,
2003]; and
(vii) No. 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R. 717 (E), dated the 9th
September, 2003],
shall, respectively, be utilized only for payment of duty on final products, in respect of which
exemption under the said respective notifications is availed of:
Provided also that no credit of the additional duty leviable under sub-section (5) of section 3
of the Customs Tariff Act, as amended by clause 72 of the Finance Bill, 2005, the clause which
has, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of
Taxes Act, 1931, the force of law, shall be utilised for payment of service tax on any output
service:
Provided also that the CENVAT credit of any duty mentioned in sub-rule (1), other than
credit of additional duty of excise leviable under clause 85 of the said Finance Bill, the clause
which has, by virtue of the declaration made in the said Finance Bill under the Provisional
Collection of Taxes Act, 1931, the force of law, shall not be utilised for payment of said additional
duty of excise on final products.
(5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such
from the factory, or premises of the provider of output service, the manufacturer of the final
products or provider of output service, as the case may be, shall pay an amount equal to the
credit availed in respect of such inputs or capital goods and such removal shall be made under
the cover of an invoice referred to in rule 9:
Provided that such payment shall not be required to be made where any inputs are removed
outside the premises of the provider of output service for providing the output service:
Provided further that such payment shall not be required to be made when any capital goods are
removed outside the premises of the provider of output service for providing the output service
and the capital goods are brought back to the premises within 180 days, or such extended period
not exceeding 180 days as may be permitted by the jurisdictional Deputy Commissioner of
Central Excise, or Assistant Commissioner of Central Excise, as the case may be, of their
removal.
(6) The amount paid under sub-rule (5) shall be eligible as CENVAT credit as if it was a duty paid
by the person who removed such goods under sub-rule (5).
(7) Notwithstanding anything contained in sub-rule (1) and sub-rule (4), -
(a) CENVAT credit in respect of inputs or capital goods produced or manufactured, by a hundred
per cent. export-oriented undertaking or by a unit in an Electronic Hardware Technology Park or
in a Software Technology Park other than a unit which pays excise duty levied under section 3 of
the Excise Act read with serial numbers 3,5, 6 and 7 of notification No. 23/2003-Central Excise,
dated the 31st March, 2003, [G.S.R. 266(E), dated the 31st March, 2003] and used in the
manufacture of the final products or in providing an output service, in any other place in India, in
case the unit pays excise duty under section 3 of the Excise Act read with serial number 2 of the
notification No. 23/2003-Central Excise, dated the 31st March, 2003, [G.S.R. 266(E), dated the
31st March, 2003], shall be admissible equivalent to the amount calculated in the following
manner, namely:-
Fifty per cent. of [X multiplied by {(1+BCD/100) multiplied by (CVD/100)}], where BCD and CVD
denote ad valorem rates, in per cent., of basic customs duty and additional duty of customs
leviable on the inputs or the capital goods respectively and X denotes the assessable value.
(b) CENVAT credit in respect of -
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise
(Textiles
and Textile Articles) Act, 1978 (40 of 1978);
(ii) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14
of
2001);
(iii) the education cess on excisable goods leviable under section 91 read with section 93 of the
Finance (No.2) Act, 2004 (23 of 2004);
(iv) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of
excise specified under items (i), (ii) and (iii) above;
(v) the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of 2003);
(vi) the education cess on taxable services leviable under section 91 read with section 95 of the
Finance (No.2) Act, 2004 (23 of 2004); and
(vii) the additional duty of excise leviable under clause 85 of the Finance Bill, 2005, the clause
which has, by virtue of the declaration made in the said Finance Bill under the Provisional
Collection of
Taxes Act, 1931, the force of law,
shall be utilized only towards payment of duty of excise or as the case may be, of service tax
leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 or the
National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of
2001), or the education cess on excisable goods leviable under section 91 read with section 93 of
the Finance (No.2) Act, 2004, additional duty of excise leviable under section 157 of the Finance
Act, 2003, or the education cess on taxable services leviable under section 91 read with section
95 of the said Finance (No.2) Act, 2004, or the additional duty of excise leviable under clause 85
of the Finance Bill, 2005, the clause which has, by virtue of the declaration made in the said
Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law,
respectively,
on any final products manufactured by the manufacturer or for payment of such duty on inputs
themselves, if such inputs are removed as such or after being partially processed or on any
output service:
Provided that the credit of the education cess on excisable goods and education cess on taxable
services can be utilised, either for payment of the education cess on excisable goods or for the
payment of the education cess on taxable services.
Explanation.-For the removal of doubts, it is hereby declared that the credit of the additional duty
of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, 1957 (58 of 1957) paid on or after the 1st day of April, 2000, may be utilised
towards payment of duty of excise leviable under the First Schedule or the Second Schedule to
the Excise Tariff Act.
(c) the CENVAT credit, in respect of additional duty leviable under section 3 of the Customs Tariff
Act, paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively
of the First Schedule to the Excise Tariff Act shall be allowed to the extent of thirty rupees per
square meter;
Explanation.- Where the provisions of any other rule or notification provide for grant of whole or
part exemption on condition of non-availability of credit of duty paid on any input or capital goods,
or of service tax paid on input service, the provisions of such other rule or notification shall prevail
over the provisions of these rules.
4. Conditions for allowing CENVAT credit.- (1) The CENVAT credit in respect of inputs may be
taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of
the provider of output service:
Provided that in respect of final products, namely, articles of jewellery falling under heading
7113 of the First Schedule to the Excise Tariff Act, the CENVAT credit of duty paid on inputs
may be taken immediately on receipt of such inputs in the registered premises of the person who
get such final products manufactured on his behalf, on job work basis, subject to the condition
that the inputs are used in the manufacture of such final product by the job worker.
(2) (a) The CENVAT credit in respect of capital goods received in a factory or in the premises of
the provider of output service at any point of time in a given financial year shall be taken only for
an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same
financial year:
Provided that the CENVAT credit in respect of capital goods shall be allowed for the whole
amount of the duty paid on such capital goods in the same financial year if such capital goods are
cleared as such in the same financial year.
Provided further that the CENVAT credit of the additional duty leviable under sub-section
(5) of section 3 of the Customs Tariff Act, as amended by clause 72 of the Finance Bill, 2005, the
clause which has, by virtue of the declaration made in the said Finance Bill under the Provisional
Collection of Taxes Act, 1931, the force of law, in respect of capital goods shall be allowed
immediately on receipt of the capital goods in the factory of a manufacturer.
(b) The balance of CENVAT credit may be taken in any financial year subsequent to the financial
year in which the capital goods were received in the factory of the manufacturer, or in the
premises of the provider of output service, if the capital goods, other than components, spares
and accessories, refractories and refractory materials, moulds and dies and goods falling under
heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Excise Tariff Act,
are in the possession of the manufacturer of final products, or provider of output service in such
subsequent years.
Illustration.- A manufacturer received machinery on the 16th day of April, 2002 in his factory.
CENVAT of two lakh rupees is paid on this machinery. The manufacturer can take credit upto a
maximum of one lakh rupees in the financial year 2002-2003, and the balance in subsequent
years.
(3) The CENVAT credit in respect of the capital goods shall be allowed to a manufacturer,
provider of output service even if the capital goods are acquired by him on lease, hire purchase or
loan agreement, from a financing company.
(4) The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of
the value of capital goods which represents the amount of duty on such capital goods, which the
manufacturer or provider of output service claims as depreciation under section 32 of the Incometax
Act, 1961( 43 of 1961).
(5) (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after
being partially processed are sent to a job worker for further processing, testing, repair, reconditioning
or any other purpose, and it is established from the records, challans or memos or
any other document produced by the manufacturer or provider of output service taking the
CENVAT credit that the goods are received back in the factory within one hundred and eighty
days of their being sent to a job worker and if the inputs or the capital goods are not received
back within one hundred eighty days, the manufacturer or provider of output service shall pay an
amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the
CENVAT credit or otherwise, but the manufacturer or provider of output service can take the
CENVAT credit again when the inputs or capital goods are received back in his factory or in the
premises of the provider of output service
(b) The CENVAT credit shall also be allowed in respect of jigs, fixtures, moulds and dies sent by
a manufacturer of final products to a job worker for the production of goods on his behalf and
according to his specifications.
(6) The Commissioner of Central Excise having jurisdiction over the factory of the manufacturer of
the final products who has sent the input or partially processed inputs outside his factory to a jobworker
may, by an order, which shall be valid for a financial year, in respect of removal of such
input or partially processed input, and subject to such conditions as he may impose in the interest
of revenue including the manner in which duty, if leviable, is to be paid, allow final products to be
cleared from the premises of the job-worker.
(7) The CENVAT credit in respect of input service shall be allowed, on or after the day which
payment is made of the value of input service and the service tax paid or payable as is indicated
in invoice, bill or, as the case may be, challan referred to in rule 9.
5. Refund of CENVAT credit.- Where any input or input service is used in the final products which
is cleared for export under bond or letter of undertaking, as the case may be, or used in the
intermediate products cleared for export, or used in providing output service which is exported,
the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized
by the manufacturer or provider of output service towards payment of,
(i) duty of excise on any final products cleared for home consumption or for export on payment of
duty; or
(ii) service tax on output service,
and where for any reason such adjustment is not possible, the manufacturer shall be allowed
refund of such amount subject to such safeguards, conditions and limitations, as may be
specified, by the Central Government, by notification:
Provided that no refund of credit shall be allowed if the manufacturer or provider of output service
avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995,
or claims a rebate of duty under the Central Excise Rules, 2002, in respect of such duty:
Provided further that no credit of the additional duty leviable under sub-section (5) of section
3 of the Customs Tariff Act, as amended by clause 72 of the Finance Bill, 2005, the clause which
has, by virtue of the declaration made in the said Finance Bill, under the Provisional Collection of
Taxes Act, 1931, the force of law, shall be utilised for payment of service tax on any output
service.
Explanation: For the purposes of this rule, the words ‘output service which is exported’ means the
output taxable services exported in accordance with The Export of Service Rules, 2005.
6. Obligation of manufacturer of dutiable and exempted goods and provider of taxable and
exempted services.- (1) The CENVAT credit shall not be allowed on such quantity of input or
input service which is used in the manufacture of exempted goods or exempted services, except
in the circumstances mentioned in sub-rule (2).
Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule
12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the
manufacture of goods cleared without payment of duty under the provisions of that rule.
(2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any
inputs or input services, except inputs intended to be used as fuel, and manufactures such final
products or provides such output service which are chargeable to duty or tax as well as exempted
goods or services, then, the manufacturer or provider of output service shall maintain separate
accounts for receipt, consumption and inventory of input and input service meant for use in the
manufacture of dutiable final products or in providing output service and the quantity of input
meant for use in the manufacture of exempted goods or services and take CENVAT credit only
on that quantity of input or input service which is intended for use in the manufacture of dutiable
goods or in providing output service on which service tax is payable.
(3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer or the provider
of output service, opting not to maintain separate accounts, shall follow either of the following
conditions, as applicable to him, namely:-
(a) if the exempted goods are-
(i) goods falling within heading No. 22.04 of the First Schedule to the Excise Tariff Act (hereinafter
in this rule referred to as the said First Schedule);
(ii) Low Sulphur Heavy Stock (LSHS) falling within Chapter 27 of the said First Schedule used in
the generation of electricity;
(iii) Naphtha (RN) falling within Chapter 27 of the said First Schedule used in the manufacture of
fertilizer;
(iv) Naptha (RN) and furnace oil falling within Chapter 27 of the said First Schedule used for
generation of electricity;
(v) newsprint, in rolls or sheets, falling within heading No.48.01 of the said First Schedule;
(vi) final products falling within Chapters 50 to 63 of the said First Schedule,
(vii) goods supplied to defence personnel or for defence projects or to the Ministry of Defence for
official purposes, under any of the following notifications of the Government of India in the
Ministry of Finance (Department of Revenue), namely:-
(1) No. 70/92-Central Excise, dated the 17th June, 1992, G.S.R. 595 (E), dated the 17th June,
1992;
(2) No. 62/95-Central Excise, dated the 16th March, 1995, G.S.R. 254 (E), dated the 16th March,
1995;
(3) No. 63/95-Central Excise, dated the 16th March, 1995, G.S.R. 255 (E), dated the 16th March,
1995;
(4) No. 64/95-Central Excise, dated the 16th March, 1995, G.S.R. 256 (E), dated the 16th March,
1995,
the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs and
input services used in, or in relation to, the manufacture of such final products at the time of their
clearance from the factory; or
(b) if the exempted goods are other than those described in condition (a), the manufacturer shall
pay an amount equal to ten per cent. of the total price, excluding sales tax and other taxes, if any,
paid on such goods, of the exempted final product charged by the manufacturer for the sale of
such goods at the time of their clearance from the factory;
(c) the provider of output service shall utilize credit only to extent of an amount not exceeding
twenty per cent. of the amount of service tax payable on taxable output service.
Explanation I.- The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer
or provider of output service by debiting the CENVAT credit or otherwise.
Explanation II.- If the manufacturer or provider of output service fails to pay the said amount, it
shall be recovered along with interest in the same manner, as provided in rule 14, for recovery of
CENVAT credit wrongly taken.
(4) No CENVAT credit shall be allowed on capital goods which are used exclusively in the
manufacture of exempted goods or in providing exempted services, other than the final products
which are exempt from the whole of the duty of excise leviable thereon under any notification
where exemption is granted based upon the value or quantity of clearances made in a financial
year.
(5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service
tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v), (w), (za), (zm), (zp),
(zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance
Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of
exempted goods or providing exempted services.
(6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable
goods removed without payment of duty are either-
(i) cleared to a unit in a special economic zone; or
(ii) cleared to a hundred per cent. export-oriented undertaking; or
(iii)cleared to a unit in an Electronic Hardware Technology Park or Software Technology Park; or
(iv) supplied to the United Nations or an international organization for their official use or supplied
to projects funded by them, on which exemption of duty is available under notification of the
Government of India in the Ministry of Finance (Department of Revenue) No.108/95-Central
Excise, dated the 28th August, 1995, number G. S R. 602 (E), dated the 28th August, 1995; or
(v) cleared for export under bond in terms of the provisions of the Central Excise Rules, 2002; or
(vi) gold or silver falling within Chapter 71 of the said First Schedule, arising in the course of
manufacture of copper or zinc by smelting; or
(vii) all goods which are exempt from the duties of customs leviable under the First Schedule to
the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the
said Customs Tariff Act when imported into India and supplied against International Competitive
Bidding in terms of notification No. 6/2002-Central Excise dated the 1st March, 2002.
7. Manner of distribution of credit by input service distributor.- The input service distributor may
distribute the CENVAT credit in respect of the service tax paid on the input service to its
manufacturing units or units providing output service, subject to the following condition, namely:-
(a) the credit distributed against a document referred to in rule 9 does not exceed the amount of
service tax paid thereon; or
(b) credit of service tax attributable to service use in a unit exclusively engaged in manufacture of
exempted goods or providing of exempted services shall not be distributed.
8. Storage of input outside the factory of the manufacturer.- The Deputy Commissioner of Central
Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction
over the factory of a manufacturer of the final products may, in exceptional circumstances having
regard to the nature of the goods and shortage of storage space at the premises of such
manufacturer, by an order, permit such manufacturer to store the input in respect of which
CENVAT credit has been taken, outside such factory, subject to such limitations and conditions
as he may specify:
Provided that where such input is not used in the manner specified in these rules for any reason
whatsoever, the manufacturer of the final products shall pay an amount equal to the credit availed
in respect of such input.
9. Documents and accounts.- (1) The CENVAT credit shall be taken by the manufacturer or the
provider of output service or input service distributor, as the case may be, on the basis of any of
the following documents, namely :-
(a) an invoice issued by -
(i) a manufacturer for clearance of -
(I) inputs or capital goods from his factory or depot or from the premises of the consignment
agent of the said manufacturer or from any other premises from where the goods are sold by or
on behalf of the said manufacturer;
(II) inputs or capital goods as such;
(ii) an importer;
(iii) an importer from his depot or from the premises of the consignment agent of the said importer
if the said depot or the premises, as the case may be, is registered in terms of the provisions of
Central Excise Rules, 2002;
(iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of
Central Excise Rules, 2002; or
(b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in
terms of the provisions of Central Excise Rules, 2002 from his factory or depot or from the
premises of the consignment agent of the said manufacturer or importer or from any other
premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in
case additional amount of excise duties or additional duty leviable under section 3 of the Customs
Tariff Act, has been paid, except where the additional amount of duty became recoverable from
the manufacturer or importer of inputs or capital goods on account of any non-levy or short -levy
by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of
any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made
there under with intent to evade payment of duty.
Explanation.- For removal of doubts, it is clarified that supplementary invoice shall also include
challan or any other similar document evidencing payment of additional amount of additional duty
leviable under section 3 of the Customs Tariff Act; or
(c) a bill of entry; or
(d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign
Post Office; or
(e) a challan evidencing payment of service tax by the person liable to pay service tax under subclauses
(iii) and (iv) of clause (d) of sub-rule (1) of rule (2) of the Service Tax Rules, 1994; or
(f) an invoice, a bill or challan issued by a provider of input service on or after the 10th day of,
September, 2004; or
(g) an invoice, bill or challan issued by an input service distributor under rule 4A of the Service
Tax Rules, 1994.
(2) The CENVAT credit shall not be denied on the grounds that any of the documents mentioned
in sub-rule (1) does not contain all the particulars required to be contained therein under these
rules, if such doc ument contains details of payment of duty or service tax, description of the
goods or taxable service, assessable value, name and address of the factory or warehouse or
provider of input service:
Provided that the Deputy Commissioner of Central Excise or the Assistant Commissioner of
Central Excise, as the case may be, having jurisdiction over the factory of a manufacturer or
provider of output service intending to take CENVAT credit, or the input service distributor
distributing CENVAT credit on input service, is satisfied that the duty of excise or service tax due
on the input or input service has been paid and such input or input service has actually been used
or is to be used in the manufacture of final products or in providing output service, then, such
Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the
case may be, shall record the reasons for not denying the credit in each case.
(3) The manufacturer or producer of excisable goods or provider of output servi ce taking
CENVAT credit on input or capital goods or input service, or the input service distributor
distributing CENVAT credit on input service shall take all reasonable steps to ensure that the
input or capital goods or input service in respect of which he has taken the CENVAT credit are
goods or services on which the appropriate duty of excise or service tax as indicated in the
documents accompanying the goods or relating to input service, has been paid.
Explanation.- The manufacturer or producer of excisable goods or provider of output service
taking CENVAT credit on input or capital goods or input service or the input service distributor
distributing CENVAT credit on input service on the basis of, invoice, bill or, as the case may be,
challan received by him for distribution of input service credit shall be deemed to have taken
reasonable steps if he satisfies himself about the identity and address of the manufacturer or
supplier or provider of input service, as the case may be, issuing the documents specified in subrule
(1), evidencing the payment of excise duty or the additional duty of customs or service tax, as
the case may be, either-
(a) from his personal knowledge; or
(b) on the basis of a certificate given by a person with whose handwriting or signature he is
familiar; or
(c) on the basis of a certificate issued to the manufacturer or the supplier or, as the case may be,
the provider of input service by the Superintendent of Central Excise within whose jurisdiction
such manufacturer has his factory or such supplier or provider of output service has his place of
business or where the provider of input service has paid the service tax,
and where the identity and address of the manufacturer or the supplier or the provider of input
service is satisfied on the basis of a certificate, the manufacturer or producer or provider of output
service taking the CENVAT credit or input service distributor distributing CENVAT credit shall
retain such certificate for production before the Central Excise Officer on demand.
(4) The CENVAT credit in respect of input or capital goods purchased from a first stage dealer or
second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the
case may be, has maintained records indicating the fact that the input or capital goods was
supplied from the stock on which duty was paid by the producer of such input or capital goods
and only an amount of such duty on pro rata basis has been indicated in the invoice issued by
him.
(5) The manufacturer of final products or the provider of output service shall maintain proper
records for the receipt, disposal, consumption and inventory of the input and capital goods in
which the relevant information regarding the value, duty paid, CENVAT credit taken and utilized,
the person from whom the input or capital goods have been procured is recorded and the burden
of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or
provider of output service taking such credit.
(6) The manufacturer of final products or the provider of output service shall maintain proper
records for the receipt and consumption of the input services in which the relevant information
regarding the value, tax paid, CENVAT credit taken and utilized, the person from whom the input
service has been procured is recorded and the burden of proof regarding the admissibility of the
CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit.
(7) The manufacturer of final products shall submit within ten days from the close of each month
to the Superintendent of Central Excise, a monthly return in the form specified, by notification, by
the Board:
Provided that where a manufacturer is availing exemption under a notification based on the value
or quantity of clearances in a financial year, he shall file a quarterly return in the form specified,
by notification, by the Board within twenty days after the close of the quarter to which the return
relates.
(8) A first stage dealer or a second stage dealer, as the case may be, shall submit within fifteen
days from the close of each quarter of a year to the Superintendent of Central Excise, a return in
the form specified, by notification, by the Board.
(9) The provider of output service availing CENVAT credit, shall submit a half yearly return in form
specified, by notification, by the Board to the Superintendent of Central Excise, by the end of the
month following the particular quarter or half year.
(10) The input service distributor, shall submit a half yearly Statement, giving the details of credit
received and distributed during the said half year to the Superintendent of Central Excise, by the
end of the month following the half year.
9A. – Information relating to principal inputs. -
(1) A manufacturer of final products shall furnish to the Superintendent of Central Excise,
annually by 30th April of each Financial Year, a declaration in the Form specified, by a notification,
by the Board, in respect of each of the excisable goods manufactured or to be manufactured by
him, the principal inputs and the quantity of such principal inputs required for use in the
manufacture of unit quantity of such final products:
Provided that for the year 2004-05, such information shall be furnished latest by 31st December,
2004.
(2) If a manufacturer of final products intends to make any alteration in the information so
furnished under sub-rule (1), he shall furnish information to the Superintendent of Central Excise
together with the reasons for such alteration before the proposed change or within 15 days of
such change in the Form specified by the Board under sub-rule (1).
(3) A manufacturer of final products shall submit, within ten days from the close of each month,
to the Superintendent of Central Excise, a monthly return in the Form specified, by a notification,
by the Board, in respect of information regarding the receipt and consumption of each principal
inputs with reference to the quantity of final products manufactured by him.
(4) The Central Government may, by notification and subject to such conditions or limitations,
as may be specified in such notification, specify manufacturers or class of manufacturers who
may not be required to furnish declaration mentioned in sub-rule (1) or monthly return mentioned
in sub-rule (3).
Explanation: For the purposes of this rule, “principal inputs”, means any input which is used in
the manufacture of final products where the cost of such input constitutes not less than 10% of
the total cost of raw-materials for the manufacture of unit quantity of a given final products.”
10. Transfer of CENVAT credit.- (1) If a manufacturer of the final products shifts his factory to
another site or the factory is transferred on account of change in ownership or on account of sale,
merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision
for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the
CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or
amalgamated factory.
(2) If a provider of output service shifts or transfers his business on account of change in
ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a
joint venture with the specific provision for transfer of liabilities of such business, then, the
provider of output service shall be allowed to transfer the CENVAT credit lying unutilized in his
accounts to such transferred, sold, merged, leased or amalgamated business.
(3) The transfer of the CENVAT credit under sub-rules (1) and (2) shall be allowed only if the
stock of inputs as such or in process, or the capital goods is also transferred along with the
factory or business premises to the new site or ownership and the inputs, or capital goods, on
which credit has been availed of are duly accounted for to the satisfaction of the Deputy
Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central
Excise.
11. Transitional provision.- (1) Any amount of credit earned by a manufacturer under the
CENVAT Credit Rules, 2002, as they existed prior to the 10th day of September, 2004 or by a
provider of output service under the Service Tax Credit Rules, 2002, as they existed prior to the
10th day of September, 2004, and remaining unutilized on that day shall be allowed as CENVAT
credit to such manufacturer or provider of output service under these rules, and be allowed to be
utilized in accordance with these rules.
(2) A manufacturer who opts for exemption from the whole of the duty of excise leviable on goods
manufactured by him under a notification based on the value or quantity of clearances in a
financial year, and who has been taking CENVAT credit on inputs or input services before such
option is exercised, shall be required to pay an amount equivalent to the CENVAT credit, if any,
allowed to him in respect of inputs lying in stock or in process or contained in final products lying
in stock on the date when such option is exercised and after deducting the said amount from the
balance, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be
allowed to be utilized for payment of duty on any excisable goods, whether cleared for home
consumption or for export.
12. Special dispensation in respect of inputs manufactured in factories located in specified areas
of North East region, Kutch district of Gujarat, State of Jammu and Kashmir and State of Sikkim.-
Notwithstanding anything contained in these rules, where a manufacturer has cleared any inputs
or capital goods, in terms of notifications of the Government of India in the Ministry of Finance
(Department of Revenue) No. 32/99- Central Excise, dated the 8th July, 1999 [G.S.R. 508(E),
dated the 8th July, 1999] or No. 33/99- Central Excise, dated the 8th July, 1999 [G.S.R. 509(E),
dated the 8th July, 1999] or No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R.
565(E), dated the 31st July, 2001] or notification of the Government of India in the erstwhile
Ministry of Finance and Company Affairs (Department of Revenue) No.56/2002-Central Excise,
dated the 14th November, 2002 [G.S.R. 764(E), dated 14th November, 2002]or No.57/2002-
Central Excise, dated the 14th November, 2002 [ GSR 765(E), dated the 14th November, 2002]
or notification of the Government of India in the Ministry of Finance (Department of Revenue) No.
56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003]
or 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R.717 (E), dated the 9th
September, 2003, the CENVAT credit on such inputs or capital goods shall be admissible as if no
portion of the duty paid on such inputs or capital goods was exempted under any of the said
notifications.
13. Power of Central Government to notify goods for deemed CENVAT credit.- Notwithstanding
anything contained in rule 3, the Central Government may, by notification, declare the input or
input service on which the duties of excise, or additional duty of customs or service tax paid, shall
be deemed to have been paid at such rate or equivalent to such amount as may be specified in
that notification and allow CENVAT credit of such duty or tax deemed to have been paid in such
manner and subject to such conditions as may be specified in that notification even if, in the case
of input, the declared input, or in the case of input service, the declared input service, as the case
may be, is not used directly by the manufacturer of final products, or as the case may be, by the
provider of taxable service, declared in that notification, but contained in the said final products, or
as the case may be, used in providing the taxable service.
14. Recovery of CENVAT credit wrongly taken or erroneously refunded.- Where the CENVAT
credit has been taken or utilized wrongly or has been erroneously refunded, the same along with
interest shall be recovered from the manufacturer or the provider of the output service and the
provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act,
shall apply mutatis mutandis for effecting such recoveries.
15. Confiscation and penalty.- (1) If any person, takes CENVAT credit in respect of input or
capital goods, wrongly or without taking reasonable steps to ensure that appropriate duty on the
said input or capital goods has been paid as indicated in the document accompanying the input or
capital goods specified in rule 9, or contravenes any of the provisions of these rules in respect of
any input or capital goods, then, all such goods shall be liable to confiscation and such person,
shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any
contravention has been committed, or ten thousand rupees, whichever is greater.
(2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or
utilized wrongly on account of fraud, willful mis-statement, collusion or suppression of facts, or
contravention of any of the provisions of the Excise Act or the rules made thereunder with
intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in
terms of the provisions of section 11AC of the Excise Act.
(3) If any person, takes CENVAT credit in respect of input services, wrongly or without taking
reasonable steps to ensure that appropriate service tax on the said input services has been paid
as indicated in the document accompanying the input services specified in rule 9, or contravenes
any of the provisions of these rules in respect of any input service, then, such person, shall be
liable to a penalty which may extend to an amount not exceeding ten thousand rupees.
(4) In a case, where the CENVAT credit in respect of input services has been taken or utilized
wrongly by reason of fraud, collusion, willful mis-statement, suppression of facts, or contravention
of any of the provisions of the Finance Act or of the rules made thereunder with intention to evade
payment of service tax, then, the provider of output service shall also be liable to pay penalty in
terms of the provisions of section 78 of the Finance Act.
(5) Any order under sub-rule (1), sub-rule (2), sub-rule (3) or sub-rule (4) shall be issued by the
Central Excise Officer following the principles of natural justice.
16. Supplementary provision.- Any notification, circular, instruction, standing order, trade notice or
other order issued under the CENVAT Credit Rules, 2002 or the Service Tax Credit Rules, 2002,
by the Central Government, the Central Board of Excise and Customs, the Chief Commissioner
of Central Excise or the Commissioner of Central Excise, and in force at the commencement of
these rules, shall, to the extent it is relevant and consistent with these rules, be deemed to be
valid and issued under the corresponding provisions of these rules.
*****

Excise Exemption Notification- Wind Mill Energy

1st March, 2002
Notification No. 6/2002-Central Excise
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table below or specified in column (3) of the said Table read with the concerned List appended hereto, as the case may be, and falling within the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table, -
(a) from so much of the duty of excise specified thereon under the First Schedule (hereinafter referred to as the First Schedule) to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table; and
(b) from so much of the Special duty of excise leviable thereon under the Second Schedule (hereinafter referred to as the Second Schedule) to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (5) of the said Table,
subject to the relevant conditions specified in the Annexure to this notification, and referred to in the corresponding entry in column (6) of the said Table:
Provided that nothing contained in this notification shall apply to goods falling under sub-heading No. 3605.10 against S.Nos. 65, 66, 67 and 68 of the said Table on or after the 1st day of April, 2002:
Provided further that nothing contained in this notification shall apply to the goods specified against S. Nos. 193, 195, 199 and 200 of the said Table on or after the 1st day of March, 2005.
Explanation.- For the purposes of this notification, the rates specified in columns (4) and (5) of the said Table are ad valorem rates, unless otherwise specified:-
Table
S. No.
Chapter or heading No. or sub-heading No.
Description of goods
Rate under the First Schedule
Rate under the Second Schedule
Condition No.
(1)
(2)
(3)
(4)
(5)
(6)
1.
09.02
Green Tea
Nil
-
-
2.
1103.00
Tapioca starch, Maize Starch
Nil
-
-
3.
13
Lac
Nil
-
-
4.
13
Vegetable saps and extracts, used within the factory of their production for the manufacture of medicaments which are exclusively used in Ayurvedic, Unani or Siddha systems
Nil
-
-
5.
1301.10
Compounded Asafoetida, commonly known as ‘heeng’
Nil
-
-
6.
1703.90
All goods, for use in the manufacture of goods other than alcohol
Nil
-
-
7.
1901.19
Food preparations intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government
Nil
-

1

8.
20, 21 or 22
Ice-cream and non-alcoholic beverages, prepared and dispensed by vending machines
Nil
-
-
9.
2001.10
All goods
Nil
-
-
10.
2103.10
Sauces, ketchup and the like and preparations therefor
Nil
-
-
11.
2104.10
Soups and broths and preparations therefore
Nil
-
-
12.
21.06
All goods containing not more than 15% betel nut by weight and not containing tobacco in any proportion:
Provided that –
(a) no other goods falling under heading No. 21.06 are manufactured in the same factory, and
(b) the goods do not bear a brand name which is used for any other goods falling under heading No. 21.06
-
Nil
-
13.
2108.10
Preparations of a kind used in the manufacture of aerated waters, if supplied directly to a bottling plant (other than vending machines)
-
Nil
-
14.
2108.99
Sweetmeats (known as ‘misthans’ or ‘mithai’ or by any other name), namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, and papad
Nil
-
-
15.
2201.20 or 2202.20
Aerated waters prepared and dispensed by vending machines
Nil
Nil
-
16.
2202.40
All goods
Nil
-
-
17.
24.04



Biris, other than paper rolled biris, manufactured without the aid of machines, by a manufacturer by whom or on whose behalf no biris are sold under a brand name (as defined in NOTE 1 to Chapter 24), in respect of first clearances of such biris for home consumption by or on behalf of such manufacturer from one or more factories upto a quantity not exceeding 20 lakhs cleared on or after the 1st day of April in any financial year
Nil


-


-


18.
2404.99
Tobacco, used for smoking through "hookah" or ‘chilam’, commonly known as "hookah" tobacco or ‘gudaku’
Nil
Nil
_
19.
2502.29
All goods manufactured in,-
(I) factory using vertical shaft kiln, with installed capacity not exceeding 300 tonnes per day or 99,000 tonnes per annum and the total clearances of cement produced by the factory, in a financial year, shall not exceed 1,09,500 tonnes;
(II) factory using rotary kiln, with installed capacity not exceeding 900 tonnes per day or 2,97,000 tonnes per annum and the total clearances of the cement produced by the factory, in a financial year, shall not exceed 3,00,000 tonnes
Rs. 200 per tonne
-
2
20.
2504.21 or 2504.31
Marble slabs and tiles cut or sawn in India in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power and where the electromotive force used exceeds ten horse power
Rs. 30 per square metre
-
-
21
26.01 to 26.17
Ores
Nil
-
-
22
27
Naphtha and Natural Gasoline Liquid for use in the manufacture of fertiliser or ammonia
Nil
-
4 and 5
23
27
Naphtha used in a fertiliser plant during shut-down and start-up periods
Nil
-
4 and 5
24
27
Naphtha and Natural Gasoline Liquid intended for use -
(i) within the Heavy Water Plant at Baroda or Tuticorin for the manufacture of Synthesis gas or ammonia or both which are to be utilised in the manufacture of Heavy Water in such plants;
(ii) by M/s. Gujarat State Fertilizer Corporation, Baroda or M/s. Southern Petro Chemicals Industrial Corporation, Tuticorin, for the manufacture of synthesis gas or ammonia or both and if the synthesis gas or ammonia or both so manufactured is supplied respectively to the Heavy Water Plants at Baroda or Tuticorin for the manufacture of Heavy Water in such Plants
Nil
-
4 and 5


25
27
Naphtha when supplied to the power plants specified in List 1
Nil
-
3
26
27
Furnace oil intended for use as feedstock in the manufacture of fertilizers
Nil
-
4 and 5
27
27
Bio-gas
Nil
-
-
28
27
Lean gas obtained from natural gas
Nil
-
-
29
27
Residues of petroleum oils or of oils obtained from bituminous minerals, including heavy petroleum stock, low sulphur heavy stock and other residual fuel oils falling under heading No. 27.13 of the First Schedule, intended for use as fuel for the generation of electrical energy by electricity undertakings owned by or controlled by the Central Government or any State Government or any State Electricity Board or any local authority or a person licenced under Part II of the Indian Electricity Act, 1910 (9 of 1910) to supply electrical energy or a person who has obtained sanction under section 28 of the said Electricity Act, to engage in the business of supplying electrical energy, except those who produce electrical energy not for sale but produce it for their own consumption or for supply to their own undertakings
Nil
-
4 and 5


30
27
Residues of petroleum oils or of oils obtained from bituminous minerals, including heavy petroleum stock, low sulphur heavy stock and other residual fuel oils falling under heading No. 27.13 of the First Schedule, intended for use as feedstock in the manufacture of fertilizers
Nil
-
4 and 5


31
27 or 28
Synthesis gas, if used in the manufacture of Heavy Water
Nil
-
-
32
27.10
Kerosene received by the factory from the refinery intended for use in the manufacture of linear alkyl benzene or heavy alkylate and returned by the factory to the refinery from where such kerosene is received, or to a warehouse of such refinery
Explanation.- For the purposes of the exemption -
(a) the quantity of kerosene consumed in the manufacture of linear alkyl benzene or heavy alkylate shall be calculated by subtracting from the quantity of kerosene received by the factory manufacturing linear alkyl benzene or heavy alkylate, the quantity of mineral oil, falling under heading No. 27.10 of the said Schedule, generated in such manufacture and returned by the factory to a refinery, declared as such under rule 20 of the Central Excise Rules, 2002 or a warehouse, as the case may be;
(b) "warehouse" means a warehouse approved under rule 20 of the Central Excise Rules, 2002.
Nil
-
6
33
27.11
Liquefied Petroleum Gases (LPG) received by the factory from the refinery intended for use in the manufacture of Propylene or Di-butyl Para Cresol (DBPC) and returned by the factory to the refinery from where such Liquified Petroleum Gases (LPG) were received
Explanation.- For the purposes of the exemption, the amount of Liquified Petroleum Gases consumed in the manufacture of propylene shall be calculated by subtracting from the quantity of Liquified Petroleum Gases received by the factory manufacturing propylene the quantity of Liquified Petroleum Gases returned by the factory to the refinery, declared as such under rule 20 of the Central Excise Rules, 2002, from which such Liquified Petroleum Gases were received.
Nil
-
-
34
27.11
Petroleum gases and other gaseous hydrocarbons received by the factory from the refinery intended for use in the manufacture of Polyisobutylene or Methyl Ethyl Ketone (MEK) and returned by the factory to the refinery from where such Petroleum gases and other gaseous hydrocarbons are received
Explanation.- For the purposes of this exemption, the quantity of the petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene shall be calculated by subtracting from the quantity of the said gases received by the factory manufacturing polyisobutylene the quantity of the said gases returned by the factory to the refinery, declared as such under rule 20 of the Central Excise Rules, 2002, which supplied the said gases.
Nil
-
-
35
2711.21
Natural Gas
Nil
-
-
36
28
Sulphuric acid, oleum, oxygen and ammonia used in the manufacture of fertilizers
Nil
-
5
37
28
Steam
Nil
-
-
38
28
Sulphuric acid used in a fertiliser plant for demineralisation of water
Nil
-
-
39
28
Ammonia used in a fertiliser plant in refrigeration and purification process
Nil
-
-
40
28
Ammonium chloride and manganese sulphate intended for use-
(a) as fertilisers; or
(b) in the manufacture of fertlisers, whether directly or through the stage of an intermediate product
Explanation.- For the purposes of this exemption, "fertilisers" shall have the meaning assigned to it under the Fertiliser (Control) Order, 1985.
Nil
-
-
41
28
Gold potassium cyanide, manufactured from gold and used in the electronics industry
16% of the value of such gold potassium cyanide excluding the value of gold used in the manufacture of such goods
-
-
42
28
Potassium iodate
Nil
-
-
43
28
Gold potassium cyanide solution used within the factory of production for manufacture of zari
Nil
-
-
44
28
Gold potassium cyanide used within the factory of production for the manufacture of gold jewellery
Nil
-
-
45
28
Thorium oxalate
Nil
-
-
46
28 or 29
All chemicals used in the manufacture of centchroman
Nil
-
-
47
28 or 29
The bulk drugs specified in List 2
Explanation.- For the purposes of this notification, the expression "bulk drugs" means any pharamaceutical, chemical, biological or plant product including its salts, esters, stereo-isomers and derivatives, conforming to pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940 (23 of 1940), and which is used as such or as an ingredient in any formulation.
Nil
-
-
48
28 or 29
The goods specified in List 3, used for the manufacture of bulk drugs specified in List 2
Nil
-
5
49
28, 29 or 30
Anaesthetics
Nil
-
-
50
28 or 38
The following goods-
(a) Supported catalysts of any of the following metals, namely:-
(i) Gold (ii) Silver (iii) Platinum (iv) Palladium (v) Rhodium (vi) Iridium (vii) Osmium (viii) Ruthenium;
(b) compounds of the following metals, for making such catalysts and manufactured out of used or spent catalysts of such metals or metals recovered from old or used articles, or both, namely:-
(i) Gold (ii) Silver (iii) Platinum (iv) Palladium (v) Rhodium (vi)Iridium (vii) Osmium (viii) Ruthenium.
16% of the value of material, if any, added and the amount charged for such manufacture
-
-
51
28 or 38
Silicon, in all forms
Nil
-
-
52
2808.10 or 2809.00
All goods used in the manufacture of fertilizers
Nil
-
5
53
29
2-Cyanopyrazine
Nil
-
-
54
28, 29 or 30
The bulk drugs or formulations specified in List 4
Nil
-
-
55
30
Desferrioxamine injection or Deferiprone
Nil
-
-
56
30
Intravenous fluids, which are used for sugar, electrolyte or fluid replenishment
Nil
-
-
57
30
Formulations manufactured from the bulk drugs specified in List 2
Explanation.- For the purposes of this notification, the expression "formulation" means medicaments processed out of or containing one or more bulk drugs, with or without the use of any pharmaceutical aids (such as diluent, disintegrating agents, moistening agent, lubricant, buffering agent, stabiliser or preserver) which are therapeutically inert and do not interfere with therapeutical or prophylactic activity of the drugs, for internal or external use, or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals, but shall not include any substance to which the provisions of the Drugs and Cosmetics Act, 1940 do not apply.
Nil
-
-
58
31
All goods, other than those which are clearly not to be used-
(a) as fertilisers; or
(b) in the manufacture of other fertilisers, whether directly or through the stage of an intermediate product.
Nil
-
-
59
32
Wattle extract
Nil
-
-
60
32
Nitrocellulose lacquers produced in Ordnance factories belonging to the Central Government and intended for consumption for defence purposes or for supply to Central Government Departments
Nil
-
-
61
32.04 or 38.09
Finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles
Nil
-
-
62
33
Henna powder, not mixed with any other ingredient
Nil
-
-
63
33.06
Tooth powder
Nil
-
-
64
3401.11, 3401.12 or 3401.19
Soap, if manufactured under a scheme for the sale of Janata soap
Nil
-
7
65
3605.10 or 3605.90
Matches, in or in relation to the manufacture of which any one or more of the following mechanical processes is ordinarily carried on with the aid of power, namely:-
(i) the process of giving -
(a) the cardboard flats or strips, the configuration of a match box including the outer slide or the inner slide, or
(b) the veneer flats or strips, the configuration of a match box including the outer slide or the inner slide with the use of match paper;
(ii) frame filling;
(iii) dipping of splints in the composition for match heads;
(iv) filling of boxes with matches;
(v) pasting of labels on match boxes or veneers or cardboards;
(vi) affixing of the central excise stamps; and
(vii) packaging,
and cleared for home consumption packed in boxes of 50 matches each
Explanation.- Excise duty for matches packed in boxes containing any number other than 50 matches shall be calculated on pro-rata basis.
Rs. 2.00 per hundred boxes/ packs




-




















8




















66
3605.10 or 3605.90
Matches, in or in relation to the manufacture of which none of the following mechanical processes is ordinarily carried on with the aid of power, namely:-
(i) the process of giving -
(a) the cardboard flats or strips, the configuration of a match box including the outer slide or the inner slide, or
(b) the veneer flats or strips, the configuration of a match box including the outer slide or the inner slide with the use of match paper;
(ii) frame filling;
(iii) dipping of splints in the composition for match heads;
(iv) filling of boxes with matches;
(v) pasting of labels on match boxes or veneers or cardboards;
(vi) affixing of the central excise stamps; and
(vii) packaging,
and cleared for home consumption packed in boxes of 50 matches each
Explanation.- Excise duty for matches packed in boxes containing any number other than 50 matches shall be calculated on pro-rata basis.
Re. 1.00 per hundred boxes/packs



-





















8




















67
3605.10 or 3605.90
Matches, in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power and cleared for home consumption packed in boxes of 50 matches each
Explanation.- Excise duty for matches packed in boxes containing any number other than 50 matches shall be calculated on pro-rata basis.
Re. 0.50 per hundred boxes/packs
-




9


68
3605.10 or 3605.90
Matches, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power and cleared for home consumption packed in boxes of 50 matches each
Explanation.- Excise duty for matches packed in boxes containing any number other than 50 matches shall be calculated on pro-rata basis.
Rs. 3.00 per hundred boxes/ packs
-



-


69
38
Concrete mix manufactured at the site of construction for use in construction work at such site
Nil
-
-
70
38.22
Chemical reagents
Nil
-
10
71
39







ANNEXURE
Condition No.
Conditions
1.
If the manufacturer of the food preparations produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or not below the rank of the Deputy Secretary to the State Government concerned to the effect that such food preparations have been distributed free to the economically weaker sections of the society under a programme duly approved by the Central Government or the State Government concerned, within five months from the date of clearance of such goods or within such further period as the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction may allow in this regard.
2.
(i) If the cement manufacturer makes a declaration to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction regarding the installed capacity of the factory before availing of exemption under this notification or wherever there is a change in the said capacity, and furnishes such information or documents, if any, as may be required by the Deputy Commissioner or the Assistant Commissioner , as the case may be, for his satisfaction in this regard.
(ii) The exemption shall be applicable upto a maximum quantity of ninety-nine thousand tonnes in a financial year. For computing the quantity of ninety-nine thousand tonnes in a financial year, the clearances of cement effected under any other notification shall be included. However, the clearances of cement effected on payment of duty at the rate of Rs. 350 per tonne shall not be taken into account for computing the above mentioned quantity of ninety-nine thousand tonnes.
(iii) The exemption under this notification shall not be applicable to, -
(a) cement manufactured from such clinker which is not manufactured within the same factory; and
( b) cement bearing a brand name or trade name (whether registered or not) of another person.
Explanation.- For the purposes of condition (iii), "brand name" or "trade name" means a brand name or trade name, whether registered or not, that is to say, a name or a mark, such as a symbol, monogram, signature, or invented words or any writing which is used in relation to a product for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person.
3.
If, the manufacturer produces to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, a certificate to the effect that the Liquefied Natural Gas (LNG) terminal which is to supply LNG to the power project for which the supply is being made, has not been commissioned.
4.
The exemption shall be allowed if it has been proved to the satisfaction of an officer not below the rank of the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction that such goods are cleared for the intended use specified in column (3) of the Table.
5.
Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed.
6.
The Commissioner of Central Excise, having jurisdiction over the refinery, permits the kerosene to be cleared to the said warehouse for the purpose of this exemption on such conditions as he deems fit for the proper accountal for kerosene cleared from the refinery and the payment of duty thereon.
7.
If,-
(i) soaps are manufactured under a scheme for the sale of Janata soap through public distribution system approved in this behalf by the Government of India in the Ministry of Consumer Affairs, Food and Public Distribution (Department of Food and Public Distribution);
(ii) sale of such soaps are effected either through the National Co-operative Consumers Federation of India Limited or through such other organisation, as may be approved in this behalf by the said Department of Food and Public Distribution under the scheme referred to in (i) above, and such sale is at such prices to such Federation or organisation as may be fixed from time to time by the Government of India in the Ministry of Commerce and Industry (Department of Industrial Policy and Promotion).
8.
If,-
(i) bamboo is used for the splints or for both splints and veneers, the amount of exemption shall be increased, by thirty five paise per hundred boxes;
(ii) the splints of such matches are made of bamboo and the matches are packed in boxes of 40s, the rate of duty shall be four-fifths of the rate applicable to matches of identical description produced in the same factory but packed in boxes of 50s and if such packing in boxes of 50s is not done, it shall be four-fifths of the notionally determined rate for matches packed in boxes of 50s:
Provided that an officer not below the rank of Assistant Commissioner of Central Excise, having jurisdiction, is satisfied that the sum total of the capital investment made from time to time on plant and machinery installed in the industrial unit in which the said goods, under clearance, are manufactured, is not more than twenty lakh rupees.
Explanation.- While determining the sum total of the value of the capital investment, only the face value of the investment at the time when such investment was made shall be taken into account, but the value of the investment made on plant and machinery which have been removed permanently from the industrial unit or rendered unfit for any use shall be excluded from such determination.
9.
The exemption shall be available in respect of first clearances for home consumption from a factory not exceeding 120 million matches during a financial year and that clearances from the said factory during such financial year do not exceed 150 million matches and also subject to the following other conditions, namely:-
(i) the total production of matches in a calendar month during the aforesaid period by the said factory does not exceed 15 million matches;
(ii) the total clearances, if any, of matches for home consumption from the said factory during the preceding financial year, did not exceed 150 million matches:
Provided that -
(a) where bamboo is used for the splints or for both splints and veneers, the amount of exemption shall be increased by thirty-five paise per hundred boxes of 50 matches;
(b) where the splints of such matches are made of bamboo and the matches are packed in boxes of 40 matches, the rate of duty shall be four-fifths of the rate applicable to matches of identical description produced in the same factory but packed in boxes of 50 matches and if such packing in boxes of 50 matches is not done, it shall be four-fifths of the notionally determined rate for matches packed in boxes of 50 matches:
Provided further that the exemption available shall not apply to the said matches where a manufacturer uses any other manufacturer’s label which is approved by the Central Excise Officer for matches packed in boxes attracting a higher rate of duty than the rate of duty specified in the corresponding entry in column (4) of the Table.
Explanation.- For the purpose of the matches mentioned in column (3), against S. No. 67 of the said Table,-
(1) no process other than the mechanical process employed for -
(a) filling of boxes with matches;
(b) dipping of splints in the composition for match heads;
(c) frame filling;
(d) affixing of central excise stamps;
(e) packing;
(f) the process of giving -
(i) the cardboard flats or strips the configuration of a match box including the outer slide or the inner slide, or
(ii) the veneer flats or strips, the configuration of a match box including the outer slide or the inner slide with the use of match paper,
(g) pasting of labels on match boxes or veneers or cardboards, shall be deemed to be a process ordinarily carried on with the aid of power;
(2) any other manufacturer referred to in the second proviso shall mean a manufacturer in respect of whom any one or more of the following conditions relating to clearances of matches for home consumption from, or production of matches by a factory, or the process of manufacture apply, namely:-
(i) such clearances exceed 150 million matches during the financial year;
(ii) such clearances during the preceding financial year had exceeded 150 million matches;
(iii) such production of matches in a calendar month during the financial year exceeds 15 million matches;
(iv) any process mentioned in clause (1) above is ordinarily carried on with the aid of power.
10.
If manufactured by M/s. Hindustan Antibiotics Limited, Pimpri and used in the factory of production in the manufacture of kits for testing narcotic drugs and psychotropic substances.
Explanation.- For the purposes of this condition,-
(a) "narcotic drugs" and "psychotropic substances" shall have the meanings respectively assigned to them in clause (xiv) and clause(xxiii) of section 2 of the Narcotic Drugs and Psychotropic Substances Act, 1985;
(b) "kits for testing narcotic drugs and psychotropic substances" means kits consisting of chemical reagents in small bottles for testing narcotic drugs and psychotropic substances manufactured by M/s. Hindustan Antibiotics Limited, Pimpri , including test tubes droppers, test plates and similar other accessories supplied with such kits.
11.
If the unexpanded polystyrene beads are purchased by the Malaria Research Centre, New Delhi on behalf of the Government of India in the Ministry of Health and Family Welfare, for use in malaria control activities and the said Malaria Research Centre gives an undertaking –
(a) to produce a certificate from the Ministry of Health and Family Welfare to the effect that the said unexpanded polystyrene beads shall be used in malaria research activities within one month from the date of such purchase or within such extended period as the proper officer may allow; and
(b) to the effect that in case the unexpanded polystyrene beads are not so used, it shall pay duty which would have been levied thereon but for the exemption contained herein:
Provided that the said Malaria Research Centre may sell or otherwise dispose of the unexpanded polystyrene beads so purchased, subject to the condition that it shall, within a month of such sale or disposal,-
(i) intimate to the Central Excise Officer the circumstances leading to such sale or disposal; and
(ii) pay the duty which would have been levied thereon but for the exemption contained in this notification:
Provided further that the proper officer may accept the said intimation after the expiry of the specified time of one month, if he is satisfied that the said Malaria Research Centre was prevented by sufficient cause from furnishing such information or from payment of the said duty of excise within the specified time.
12.
If such tyres are for use on animal drawn vehicles or hand carts and such tubes are for use with such tyres and every such tyre and tube bears a durable and prominent marking of the letters "ADV" on it.
13.
If it is proved to the satisfaction of the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction that the parts are intended to be used as original equipment parts in the manufacture of main battle tanks falling under heading No. 87.10 of the First Schedule.
14.
(1) This exemption shall apply only to the paper and paperboard or articles made therefrom cleared for home consumption from a factory, in any financial year, upto first clearances of an aggregate quantity not exceeding 3500 Metric Tonnes.
(2) The exemption shall not be applicable to a manufacturer of the said goods who avails of the exemption under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2001- Central Excise, dated the 1st March, 2001 published in the Gazette of India vide number G.S.R. 133(E), dated the 1st March, 2001, 9/2001- Central Excise, dated the 1st March 2001, published in the Gazette of India vide number G.S.R.134 (E), dated the 1st March, 2001, published in the Gazette of India vide 8/2002- Central Excise, dated the 1st March, 2002 and 9/2002- Central Excise, dated the 1st March 2002.
Explanation.- For removal of doubts, it is hereby clarified that the first clearances of an aggregate quantity not exceeding 3500 metric tonnes shall not include clearances of any paper and paperboard or articles made therefrom which attract nil rate of duty or are exempt from the whole of excise duty under any other notification.
15.
If the manufacturer produces at the time of clearance a certificate from an authorized officer of the Handloom Co-operative Society, National Handloom Development Corporation or State Government Handloom Development Corporation, as the case may be, that the yarn is going to be used only on handlooms .
16.
If manufactured out of yarn -
(i) falling under Chapter 51,52, 54 or 55 of the First Schedule; and
(ii) on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
17.
If manufactured out of yarn -
(i) falling under Chapter 51 or 52 of the First Schedule; and
(ii) on which the appropriate duty of excise under the First Schedule, or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
18.
If ,-
(i) manufactured out of yarn falling under Chapter 51, 52, 54 or 55 of the First Schedule; and
(ii) manufactured out of yarn on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid; and
(iii) the dyeing, printing, bleaching or mercerising is done without the aid of power or steam.
19.
If manufactured out of yarn -
(i) falling under Chapter 51,52,54 or 55 of the First Schedule; and
(ii) on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid; and
(iii) no credit under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 has been availed in the process of dyeing, printing, bleaching or mercerising in the manufacture of dyed, printed, bleached or mercerised yarn.
20.
If no credit under rule 3 or rule 11 of the CENVAT Credit Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods.
21.
The exemption shall not apply to,-
(a) woven fabrics of wool, if such fabrics are processed in a factory having facilities (including plant and equipment) for carrying out bleaching, dyeing or printing or any one or more of these processes with the aid of power or steam;
(b) woven fabrics of cotton or man-made fibres, if such fabrics are processed in a factory having facilities (including plant and equipment) for carrying out bleaching, dyeing, printing, flanellete raising, stentering, damping on grey or bleached sorts, back filling on grey and bleached sorts, singeing ( that is to say, burning away of knots and loose ends in the fabrics), cropping or butta cutting, curing or heat-setting, padding ( that is to say, applying starch or fatty material on one or both sides of the fabric), expanding or blowing or any one or more of these processes with the aid of power or steam.
22.
If,-
(i) a certificate to the effect that such fabrics have been woven in a prison and have been sent for further processing to an independent processor or a composite mill, outside the prison is given by the Inspector General of the Prisons or an officer duly authorised by him in this behalf in the Government of the State or the Union territory, as the case may be;
(ii) a separate account is maintained in respect of such fabrics by the said independent processor or a composite mill; and
(iii) the said independent processor or a composite mill produces a certificate or evidence to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, within a period of ninety days or such extended period as may be permitted by the Commissioner of Central Excise, to the effect that the said fabrics have been returned after processing to the prison from which the fabrics were received.
23.
If produced out of yarn-
(i) falling under Chapter 52, 54 or 55 of the First Schedule; and
(ii) on which the appropriate duty of excise under the First Schedule, special duty of excise under the Second Schedule , or as the case may be, the additional duty leviable under section 3 of the Customs Tariff Act, 1975, has already been paid.
24.
If the manufacturer produces at the time of clearance a certificate from an authorized officer of the Khadi and Village Industries Commission, that the yarn is going to be used only in the manufacture of Poly Vastra, that is to say, any cloth, containing cotton and polyester, woven on handloom from yarns hand spun in India.
25.
If the appropriate duty of excise under the First Schedule has already been paid on the unprocessed jute manufactures used in the manufacture of these jute products.
26.
If, in or in relation to the manufacture of which, no process is ordinarily carried on with the aid of power.
27.
If,-
(i) manufactured out of yarn falling under sub-heading No. 5402.42 of the First Schedule on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975, has already been paid; and
(ii) no credit of duty paid on inputs has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.
28.
If manufactured out of textured or draw-twisted polyester filament yarn falling under Chapter 54 of the First Schedule on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
29.
If manufactured out of nylon filament yarn including crimped or textured nylon filament yarn falling under Chapter 54 of the First Schedule on which the appropriate duty of excise under the First Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
30.
If manufactured out of viscose filament yarn including textured viscose filament yarn falling under Chapter 54 of the First Schedule on which the appropriate duty of excise under the First Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
31
If,-
(i) manufactured out of textured or draw-twisted yarn, falling under Chapter 54 of the First Schedule on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule , or as the case maybe, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid; and
(ii) no credit under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 has been availed in the process of dyeing, printing, bleaching or mercerising in the manufacture of dyed, printed, bleached or mercerised yarn.
32
If,-
(i) the dyeing, printing, bleaching or mercerising is done without the aid of power or steam; and
(ii) manufactured out of yarn falling under Chapter 54 of the First Schedule on which the appropriate duty of excise under the First Schedule, the special duty of excise leviable under the Second Schedule to the Central Excise Tariff Act, or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
33.
If manufactured out of polypropylene filament yarn on which the appropriate duty of excise under the First Schedule , or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 has already been paid.
34.
If made from yarn, monofilament, tapes or strips on which the appropriate duty of excise leviable under the First Schedule, the special duty of excise leviable under the Second Schedule or, as the case may be, the additional duty leviable under the Customs Tariff Act, 1975, has already been paid.
35.
If the manufacturer declares in the invoice at the time of clearance that these goods are made out of handloom fabrics and is duly supported by a certificate from an authorized officer of the Handloom Export Promotion Council that these goods have been made out of handloom fabrics.
36.
If the manufacturer maintains proper account in such form and in such manner as the Commissioner of Central Excise having jurisdiction may specify in this behalf, for receipt and use of fly-ash or phospho-gypsum or both, in the manufacture of all goods falling under Chapter 68 of the First Schedule and files a monthly return in the form and manner, as may be specified by such Commissioner of Central Excise, with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction.
37.
If the Nirman Kendra or the Nirmithi Kendra produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India in the Ministry of Urban Development, to the effect that-
(a) the said Nirman Kendra or the said Nirmithi Kendra is recognised as such by the Government of India; and
(b) the goods manufactured by such Nirman Kendra or Nirmithi Kendra are intended for construction of low cost houses.
38.
If such glazed tiles are not subjected to the process of printing, decorating or ornamenting by the job worker, for or on behalf of any manufacturer of glazed tiles.
39
If such goods are not produced or manufactured by a manufacturer who produces or manufactures steel from iron ore or concentrate.
40.
If,-(a) the castings and forgings produced in a factory are used in that factory for the production of sewing machines or chaff cutters; or
(b) the castings or forgings are supplied directly from the factory of manufacture, to the factory of a manufacturer of sewing machines or chaff cutters and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction is satisfied that the castings or forgings are intended for use in the manufacture of sewing machines or chaff cutters.
41.
If manufactured out of rails on which duty of excise has been paid and no credit of duty paid on such rails has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.
42.
If,-(a) in or in relation to the manufacture of such containers no process is ordinarily carried on with the aid of power; or
(b) such containers are produced by the manufacturer thereof without the aid of power from sheets which had been tinned, printed, coated or lacquered by others with the aid of power.
43.
If such goods are not produced or manufactured by a manufacturer who produces or manufactures copper from copper ore or copper concentrate.
44.
If,-(a) no credit of duty paid on inputs under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 has been taken;
(b) the entire amount of duty is paid in cash or through account – current:
Provided that the duty shall not be payable by a manufacturer who produces or manufactures trimmed sheets or circles from duty paid untrimmed sheets or circles.
45.
If such goods are not produced or manufactured by a manufacturer who produces or manufactures aluminium from aluminium ore or aluminium concentrate.
46.
If manufactured from goods falling within heading Nos. 82.02 to 82.05 of the First Schedule, on which duty of excise specified in the First Schedule or the additional duty leviable under the Customs Tariff Act, 1975, as the case may be, has already been paid.
47.
The duty would be leviable as if the value of the spinnerettes were equal to-
(i) the cost of exchange, that is to say, the aggregate of-
(a) labour charges;
(b) price charged for that quantity of gold, platinum and rhodium, if any, which is in excess of the respective quantity of gold, platinum or rhodium contained in the worn out or damaged spinnerettes; and
(c) any other charges paid for the exchange of such spinnerettes; and
(ii) the insurance and freight charges, both ways.
48.
If no credit of duty paid on the chassis and compressor has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.
49.
If,-(i) made from unrecorded articles falling under heading No. 85.23; and
(ii) (a) not intended for sale; or
(b) intended for sale or supply to All India Radio or any other Department of Government of India in the Ministry of Information and Broadcasting; or
(c) intended for sale or supply, in the form of U-matic video tapes formats of width not less than 19 millimeters, to Doordarshan.
50.
If,-(a) intended for use by the Indian Railways or the Konkan Railway Corporation; and
(b) the ownership of the said goods vests in the Indian Railways or the Konkan Railway Corporation.
51.
(a) The manufacturer pays duties of excise at the rate of 16% ad valorem under the First Schedule and 16% ad valorem under the Second Schedule in the case of motor vehicle falling under sub-heading No. 8702.10 or sub-heading No. 8703.90, at the time of clearance of the vehicle;
(b) the manufacturer files the claim for refund of duty paid in excess of that specified under this exemption, with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, before the expiry of six months from the date of payment of duty on the said motor vehicle;
(c) the manufacturer furnishes to the said Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, a certificate from an officer authorised by the concerned State Transport Authority, to the effect that the said motor vehicle has been registered for use solely as ambulance or taxi, as the case may be, within three months, or such extended period not exceeding a further period of three months as the said Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, may allow, from the date of clearance of the said motor vehicle from the factory of the manufacturer;
(d) where the manufacturer has collected an amount, as representing the duties of excise, in excess of the duties payable under this exemption from the buyer, on receipt of a communication from the said Deputy Commissioner or Assistant Commissioner, as the case may be, that the claim is otherwise eligible for sanction, the manufacturer shall return the excess amount so collected and submit evidence to the said Deputy Commissioner or Assistant Commissioner to the effect that the said amount has been duly returned to the buyer; and
(e) in the case of ambulance, the concessional rate of duty shall apply only when the ambulance is supplied to –
(i) hospitals, nursing homes or sanatoriums, run by the Central Government or a State Government or a Union territory Administration or a local authority, or are registered as such with any Department of the Central Government, or a State Government or a Union territory Administration or a local authority; or
(ii) the Indian Red Cross Society.
52.
If manufactured out of chassis falling under heading No. 87.06 on which duty of excise has been paid and no credit of duty paid on such chassis and other inputs used in the manufacture of such vehicle has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002:
Provided that this exemption is not applicable to a manufacturer of said vehicles-
(a) who is manufacturing such vehicle on a chassis supplied by a chassis manufacturer, the ownership of which remains vested in the chassis manufacturer or the sale of the vehicle so manufactured is made by such chassis manufacturer on his account; and
(b) who is manufacturing chassis and using such chassis for further manufacture of such vehicle.
53.
If no credit of duty paid on the chassis falling under heading No. 87.06 has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002.
54.
If an officer not below the rank of the Deputy Secretary to the Government of India in the Ministry of Industry certifies that the said goods are capable of being used by the physically handicapped persons.
55.
If manufactured out of chassis and equipment, on which the duty of excise leviable under the First Schedule or the additional duty leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has already been paid.
56.
If, before the clearance of the goods, the manufacturer produces to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction over his factory –
(a) a certificate from the Protocol Division of the Ministry of External Affairs that the concerned foreign diplomatic or consular mission is entitled to exemption from excise duty based on the principle of reciprocity; and
(b) an undertaking from the head of the concerned diplomatic mission or consulate or by an officer duly authorized by him, that-
(i) he will produce a certificate, within three months from the date of clearance of the goods or such extended period as may be permitted by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, that the goods have been put to use, or are in the use, as the case may be, of the mission or consulate;
(ii) the goods will not be sold or otherwise disposed of before the expiry of three years from the date of clearance of the goods, and
(iii) in the event of non compliance of sub-clause (i), the diplomatic or consular mission will pay the duty which would have been leviable at the time of clearance of goods, but for this exemption.
57.
If,-
(i) the project for the purpose of substitution of ozone depleting substances or for setting up of new projects with non-ozone depleting substances (non-ODS) technologies has been approved by the steering committee set up in the Ministry of Environment and Forests of the Government of India for the clearance of such projects;
(ii) the manufacturer furnishes, in each case, a certificate duly signed by an officer not below the rank of the Deputy Secretary to the Government of India in the Ministry of Environment and Forests to the effect that the said goods are required for the said purpose.
58.
If the goods are used,-
(i) in the manufacture of the following power driven pumps primarily designed for handling water, namely :-
(a) Centrifugal pumps (horizontal or vertical pumps);
(b) Deep tube-well turbine pumps;
(c) Submersible pumps;
(d) Axial flow and mixed flow vertical pumps; and
(ii) (a) within the factory of production; or
(b) where such use is elsewhere than in the factory of production, the procedure set out in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed.
59.
If, duty of excise on the chassis leviable under the First Schedule or special duty of excise leviable under the Second Schedule or the additional duty leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid.
LIST 1(See S.No. 25 of the Table )
(1) 120 MW Combined Cycle Gas Turbine Power Plant at Basin Bridge, Chennai, of Tamil Nadu Electricity Board;
(2) 20 MW Power Plant of Ms Nagarjuna Electric Generating Company at Patancheru, Medak Distric, Andhra Pradesh
(3) 515 MW Combined Cycle Power Plant at Hazira, Gujarat of Ms Essar Power Limited;
(4) 167 MW Combined Cycle Power Plant at Vadodara of Ms Gujarat Industries Power Corporation Limited;
(5) 48 MW Combined Cycle Power Plant at Sancoale village, Mormugao District, Goa, of Ms Reliance Salgaoncar Company Limited;

(6) 220 MW Barge Mounted Power Plant at Mangalore of Ms Tanir Bavi Power Company Private Limited, Bangalore;
(7) 165 MW Combined Cycle Power Plant at Eloor, District Ernakulam, Kerala of Ms BSES Kerala Power Limited.
LIST 2 (See S. Nos. 47 ,48 and 57 of the Table)
(1) Streptomycin
(2) Isoniazid
(3) Thiacetazone
(4) Ethambutol
(5) Sodium PAS
(6) Pyrazinamide
(7) Dapsone
(8) Clofazamine
(9) Tetracycline Hydrochloride
(10) Pilocarpine
(11) Hydrocortisone
(12) Idoxuridine
(13) Acetazolamide
(14) Atropine
(15) Homatropin
(16) Chloroquine
(17) Amodiaquine
(18) Quinine
(19) Pyrimethamine
(20) Sulfamethopyrezine
(21) Diethyl Carbamazine
(22) Arteether or formulation of artemisinin.
LIST 3 (See S. No. 48 of the Table )
(1) Meta Aminophenol
(2) Para Nitrochlorobenzene (PNCB)
(3) Picolines
(4) Novaldiamine
(5) Ethoxy methylene diethyl-malonate
(6) Hydrazine Hydrate
(7) DL-2 Amino-1 butanol
(8) Guanidine Nitrate
(9) Citric Acid
(10) 4,7-DCQ (Dichloroquinoline)
(11) N-methyl Piperazine
(12) D-2-Aminobutanol (O-Aminobutanol)
(13) Diethyl Carbamyl Chloride
(14) 4-Cyanopyridine
(15) Isonicotinic acid
(16) Thiosemicarbazide
(17) 1-Nitropropane
(18) 4-Amino-4 Nitrodiphenyl sulphide
(19) N-(4-Chlorophenyl)-O-Phenylene diamine
(20) 5-Iodouracil
(21) 1-Acetyl-5-Iodouracil
(22) 2-Amino-5-Mercapto-1,2,4-Thiadiazole
(23) 2-Amino-5-Amino-Sulfomyl-1,3,4-Thiadiazole
(24) 2-Acetylamino-5-Mercapto-1,3,4-Thiadiazole
(25) Tetra Urea Complex.
LIST 4 (See S.No. 54 of the Table)
(1) Didanosine
(2) Efavirenz
(3) Indinavir
(4) Insulin
(5) Lamivudine
(6) Nelfinavir
(7) Nevirapine
(8) Ritonavir
(9) Saquinavir
(10) Stavudine
(11) Zidovudine
LIST 5 (See S. No. 191 of the Table )
(1) Coconut husk crusher
(2) Coconut husk defibering mill
(3) Sifter or Siever (for separating coir fibre from pith)
(4) Turbo cleaner (for cleaning the fibre)
(5) Bailing press

(6) Willowing machine (for cleaning and preparing fibre for spinning)
(7) Motorised Spinning Ratts.
List 6 (See S.No. 193 of the Table)
(1) Yarn / Fabric mercerising machine
(2) Continuous bleaching plant
(3) Fabric dyeing machine complete with dye kitchen & accessories
(4) Wet fabric spreading and squeezing machine
(5) Relax drum/conveyer drying machine
(i) Drying range
(ii) Float dryer
(iii) Loop dryer
(iv) Drum dryer
(v) Jet dryer
(vi) Rapid dryer
(6) Compacting Machine
(7) HTHP Hosiery yarn dyeing machine complete with dye kitchen and accessories
(8) Soft package winders (dye package winders)
(9) Automatic dye weighing and dispensing machine
(10) Open width Tubular inspection machine
(11) Fastness testing equipment
(12) Shrinkage testing equipment
(13) Indigo dyeing range with/without sizing plant
(14) Computer colour matching equipment
(15) High speed computer control padding mangle
(16) Powder dot coating machine
(17) Laser engraver
(18) Pre-shrinking range for flat and Knitted goods
(19) Knit-tubular mercerising or bleaching-cum-mercerising machine
(20) Auto flame controlled, width controlled singeing machine for flat and Knitted fabrics
(21) Milling and scouring machine
(22) Shearing and Polishing machine
(23) Kier Decatising/Decatising machine
(24) Combined Contripress/ Decatising machine
(25) Auto fabric detwister
(26)Rotary/Flat bed screen printing machine
(27)Curing/Polymerising machine
(28) Continuous rope/open width washing machine
List 7 (See S. No. 195 of the Table)
(1) Automatic reeling machinery for reeling of silk consisting of continuous hot air drier(conveyer type), continuous cocoon boiling machine(conveyer type) and automatic reeling machine with re-reeling
(2) Silk weaving and twisting machines consisting of hank-to-bobbin cone winders, silk doubling machine, two-for-one/ three-for-one twisters, vacuum autoclave and rewinding machine for bobbin to hank and Electronic jacquard weft knitting machine
(3) Arm dyeing machine for hank degumming dyeing
(4) Hank dryers (continuous type)
(5) Silk felt calender
(6) Clip stenter
(7) Silk calender
(8) Silk decasting machine
(9) Overflow machine for silk fabric dyeing

(10) Cone-chees degumming and dyeing machine
(11) Beam dyeing machine for silk fabric
(12) Semi-automatic screen printing machine
(13) Loop agers
(14) Design studio equipment
(15) Colour kitchen equipment
(16) Colour matching computer
LIST 8 (See S.No. 196 of the Table )
(1) Gas Compressor, all types
(2) Flywheel and pulley
(3) Truck refrigeration unit
(4) Walk-in-coolers / walk-in-freezer
(5) Condensing unit
(6) Evaporator
(7) Oil separator
(8) Receiver
(9) Purger
(10) Air cooling unit/ air handling unit, all types
(11) Evaporator coil, all types
(12) Plate freezer
(13) Blast freezer
(14) IQF freezer
(15) Cooling tower
(16) Condensor-atmospheric/shell and tube/ evaporative
(17) Valves and fittings
(18) mobile pre-cooling equipment
(19) stationary pre-cooling equipment
(20)control equipment for control atmosphere/modified atmosphere cold storage
LIST 9 ( See S. No. 237 of the Table )
(1) Flat plate solar collector
(2) Black continuously plated solar selective coating sheets (in cut length or in coil) and fins and tubes
(3) Concentrating and pipe type solar collector
(4) Solar cooker
(5) Solar water heater and system
(6) Solar air heating system
(7) Solar low pressure steam system
(8) Solar stills and desalination system
(9) Solar pump based on solar thermal and solar photovoltaic conversion
(10) Solar power generating system
(11) Solar photovoltaic module and panel for water pumping and other applications
(12) Solar crop drier and system
(13) Wind operated electricity generator, its components and parts thereof
(14) Water pumping wind mill, wind aero-generator and battery charger
(15) Bio-gas plant and bio-gas engine
(16) Agricultural, forestry, agro-industrial, industrial, municipal and urban waste conversion device producing energy
(17) Equipment for utilising ocean waves energy
(18) Solar lantern
(19) Ocean thermal energy conversion system
(20) Solar photovoltaic cell
(21) Parts consumed within the factory of production of such parts for the manufacture of goods specified at S.Nos. 1 to 20 above.
T. R. RustagiJoint Secretary to the Government of India
F.No.334/1/2002-TRU