CENTRAL EXCISE by g. natarajan, advocate swamy associates

MANUFACTURE  Section 2 (f).  Deemed Manufacture. Chapter 72 – galvanization. Chapter 26 – conversion of ores into concentrates.  Third Schedule. which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.

MANUFACTURE  UOI Vs Delhi Cloth & General Mills 1977 (1) ELT J 199 SC. ED is on manufacture and not on sale. Goods much be something, which can be bought and sold. “ Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use.”  37 B Order No. 58/1/2002 Dt

MANUFACTURE  Ammonia Supply Co Vs CCE 2001 (131) ELT 626 Tri Repacking from bulk to retail – tanker to cylinder is not manufacture. ”  Conybio Healthcare Vs CCE (216) ELT 586 Tri. Labeling / relabeling and repacking.  CCE Vs Rajpurohit – 2008 (231) ELT 577 SC. CCE Vs S.R. Tissues – 2005 (186) ELT 385 SC. Cutting and Slitting – Not manufacture.

VALUATION  Section 4 – Transaction Value. - in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value. “transaction value” means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.

VALUATION RULES  Rule 4 : Comparable Price. Story of Physician Samples.  Rule 5 : Freight & Insurance. Baroda Electric Meters – 1997 (94) ELT 13 SC.  Rule 6 : Additional Consideration. (Amortisation)  Rule 7 : Depot Clearances.  Rule 8 : Captive consumption.  Rule 9 : Related Persons.  Rule 10 : Interconnected undertakings.  Rule 10 A : Job work.  Rule 11 : Best Judgement.

VALUATION  UOI Vs Bombay Tyre International 1984 (17) ELT 329 SC Discounts to be excluded.  Koya & Co Industries (P) Ltd Vs CCE (213) ELT 691 Pipes sold to to related person – further used in laying – Value should be cost plus 10 % - Rule 11, 9 and 8.

SECTION 4 A  Notified commodities.  Requirement of MRP under Legal Metrology Act.  Prescribed abatements.  Industrial / Institutional Consumer.  Multi-piece package / Combination package Wholesale package.  The ITC Story.

JOB WORK  Who is the manufacturer? KSEB Vs CCE – 1992 (62) ELT A 52 SC.  Notification 214/86.  Notifications 83 & 84/94.  Rule 4 (5) (a) of CCR,  Ujagar Prints Case.  Rule 10 A of Valuation Rules. - If sold by principal. - If sold through depot. - If used in further manufacture.

ADJUDICATION AND APPEAL  Normal period Vs Extended Period.  Time limit for adjudication.  Penalties, Interest and Confiscation.  Search and Seizure.  Summons and Statement.  Arrest and Prosecution.  Recovery measures.  Provisional attachment.  Appellate remedies.  Pre deposit.  Settlement Commission.  Compounding Scheme.

LARGEST TAX PAYER UNIT  Eligibility.  Transfer of inputs.  Transferred of manufactured goods.  Transfer of credit.

EXEMPTIONS  End use based exemptions. Eg. Supplies to defence / SEZ.  Small scale exemption. Upto Rs.1.5 Crores – Previous year less than Rs.4 crores. Others brand – No exemption (rural area). No cenvat credit.  Area based exemption. (Refund mode / Exemption mode)

MISCELLENEOUS  Self Assessment / Provisional assessment.  Due date for payment of duty and consequences for failure. Godrej Hershey Limited Vs CCE.  Refunds.  Exports - without payment of duty. - under claim for rebate.  ER1 to ER 7.  Supplementary Invoices.  Section 11D.  Return of goods.  Remission of duty.

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