01 February, 2017

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Changes in Central Excise Rules by Budget 2017

Changes in Central Excise Rule by Budget 2017
Amendment in central excise rule is:
S No.
Amendment
Governing Provision
Applicability Date
Remarks
1
Sub-rule (2) is being inserted in rule 21 of Central Excise Rules, 2002
As amended by Notification No.5/2017-Central Excise (N.T.), dated 02.02.2017 read with Rule 21 of Central Excise Rules, 2002 along with section 5 of Central Excise Act,1944
2nd February 2017
A time limit of 3 months [further extendable by 6 months] for granting remission has been fixed.
2.
Sub-rule (4) is being inserted in rule 10 of CENVAT Credit Rules, 2004
As amended by Notification
No.4/2017-Central Excise (N.T.), dated 02.02.2017 refers.
2nd February 2017
A maximum time limit 6 months for approval of requests regarding
transfer of CENVAT credit on shifting, sale, merger, etc. of the factory.


Explanation of provisions before budget 2017
1. Sub-rule (2) is being inserted in Rule 21 of Central Excise Rule, 2002
Section 5-Remission of duty on goods found deficient in quantity-
“(1)The Central Government may, by rules made under this section, provide for remission of duty of excise leviable on any excisable goods which due to any natural cause are found to be deficient in quantity.
(2) Any rules made under sub-section (1) may, having regard to the nature of the excisable goods or of processing or of curing thereof, the period of their storage or transit and other relevant considerations, fix the limit or limits of percentage beyond which no such remission shall be allowed:
Provided that different limit or limits of percentage may be fixed for different varieties of the same excisable goods or for different areas or for different seasons”
Rule 21: Remission of duty.-
(1) Where it is shown to the satisfaction of the [Principal Commissioner or Commissioner, as the case may be] that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods, subject to such conditions as may be imposed by him by order in writing:


Amount
Authorised Person
Up to Rs 10,000
Superintendent of Central Excise
Rs. 10,000 - Rs.1,00,000
Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise,
Rs 1,00,000 – Rs. 5,00,000
Joint Commissioner of Central Excise or Additional Commissioner of Central Excise, as the case may be
More than Rs. 500000
Principal Commissioner or Commissioner, as the case may be


Notification No.5/2017-Central Excise (N.T.), dated 02.02.2017
G.S.R. (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise Rules, 2002, namely :-
1. These rules may be called the Central Excise (Amendment) Rules, 2017.They shall come into force on the date of their publication in the Official Gazette.
2. In the Central Excise Rules, 2002, rule 21 shall be re-numbered as sub-rule (1) thereof, and after sub-rule (1) as so re-numbered, the following sub-rule shall be inserted, namely:-
“(2) The authority referred to in sub-rule (1) shall, within a period of three months from the date of receipt of an application, decide the remission of duty:
Provided that the period specified in this sub-rule may, on sufficient cause being shown and reasons to be recorded in writing, be extended by an authority next higher than the authority before whom the application for remission of duty is pending, for a further period not exceeding six months.”.


2. Sub-rule (4) is being inserted in Rule 10 of CENVAT Credit Rules, 2004
Rule 10 of CENVAT Credit Rules, 2004
Transfer of CENVAT credit
As per rule 10 if
(1) Any manufacturer of the final products shifts his factory to another site and
(2) 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/ factory to a joint venture with the specific provision for transfer of liabilities of such business/ factory, then, the provider of output service/manufacturer 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.
Notification No. 4/2017- Central Excise
G.S.R._(E).- In exercise of the powers conferred by section 37 of the Central Excise
Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules,2004, namely:-
1. (1) These rules may be called the CENVAT Credit (Amendment) Rules, 2017.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 6, in sub rule
(3D), in Explanation I, in clause (e), the following proviso shall be inserted, namely:-
“Provided that this clause shall not apply to a banking company and a financial institution including a non-banking financial company, engaged in providing services by way of extending deposits, loans or advances.”.
3. In rule 10 of the said rules, after sub-rule (3), the following sub-rule shall be inserted, namely:-
“(4) Subject to the provisions contained in sub-rule (3), the transfer of the CENVAT Credit shall be allowed within a period of three months from the date of receipt of application by the Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be:

Provided that the period specified in this sub-rule may, on sufficient cause being shown and reasons to be recorded in writing, be extended by the Principal Commissioner of Central Excise or Commissioner of Central Excise, as the case may be, for a further period not exceeding six months.”





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