Amendments in Central Excise Relevant for CA Final November -2015 Examination
- Under Rule 4(1) and 4(2) Inputs and Capital goods can be sent to the job-worker directly without bringing in the factory or premises of service provider (assessees) and they can cenvat credit as soon as inputs and capital goods are received by the job-worker. Notification No. 6/2015 CE (NT) dated 01.03.2015
- Accordingly another amendment is in Rule 4(5). Inputs sent to job-worker directly should be received back by the assessee within 180 days otherwise he will have to make reversal of cenvat credit availed on inputs (no change). However, in case of capital goods, the period has been increased to two years.
- Time limit for availing the cenvat credit on inputs and input services under Rule 4(1) and 4(7) respectively has been increased to one year.
- In case of partial RCM services, the service receiver is entitled to avail credit for the amount of service tax that he is required to pay to the central government directly only after actually making payment to the Central Government. He is not required to make any reversal of credit if he has paid the amount of service tax to the government but has not paid to the service provider. [w.e.f. 1.4.2015]
- Reversal of credit required to made under Rule 4 i.e. Rule 4(5) and 4(7), shall be made within 5 days after the end of month failing which provisions of Rule 14 (wrongly availing credit) will be attracted.
- In Rule 5, export goods have been defined i.e. any goods which are to be taken out of India to a place outside India.
- Under Rule 6, exempt goods include even non-excisable goods also. It means where an assessee uses common inputs and input services for dutiable and exempt goods as well as taxable and exempt services, if assessee avails full credit on all inputs and input services, he will have to pay duty @ 6% even on non-excisable goods.
- Provisions of Rule 9(4) applicable to FSD and SSD regarding maintenance of records are now applicable to registered importer also.
- Under Rule 12AAA, restrictions can be imposed on registered importer also due to misuse of provisions related to cenvat credit.
- CENVAT credit wrongly taken will be recovered in accordance with the provisions of Section 11A of the Central Excise Act, 1944 and Section 73 of the Finance Act 1994.
- Where an assessee has wrongly availed excess credit and utilized it then utilization the utilisation thereof will be deemed to have occurred in the following manner, namely: -
- the opening balance of the month has been utilised first;
- credit admissible in terms of these rules taken during the month has been utilised next;
- credit inadmissible in terms of these rules taken during the month has been utilized thereafter.
- Circular No. 990/14/2014 CX dated 19.11.2014 clarifies that the time limit of one year for availing cenvat credit would not apply when re-credit is taken of amount reversed under:
- third proviso (now second proviso) to rule 4(7) of the CENVAT Credit Rules, 2004 (CCR)
- rule 3(5B) of CCR
- rule 4(5)(a) of CCR,
only when the credit is taken for the first time on an eligible document.
- Circular No. 999/6/2015 CX dated 28.02.2015 – For the purpose of exports of goods by the manufacturer exporter the place of removalwill be the port/ICD/CFS where the shipping bill is filed by the manufacturer exporter. However, if manufacturer supplies the goods to the merchant exporter then the place of removal shall be factory gate but on case to case, it may differ also.
General Procedures Under Central Excise