TAX LAW

Additional Duties of Excise (Goods of Special Importance) Act,1957 - Index

Sections

Additional Duties of Excise (Goods of Special Importance) Act,1957

CHAPTER I : PRELIMINARY

1. 2.

Short title and extent Definitions

CHAPTER II : LEVY AND COLLECTION OF ADDITIONAL DUTIES

3. 4. 5. 6. 7.

Levy and collection of Additional Duties Distribution of additional duties among States Expenditure to be charged on the Consolidated Fund of India Powers to make rules Declaration of certain goods to be of special importance in inter -State trade or commerce

1. Short title and extent. - (1) This Act may be called the Additional Duties of Excise (Goods of Special Importance) Act,1957. (2) It extends to the whole of India. 2. Definitions. - In this Act, (a) additional duties means the duties of excise levied and collected under sub-section (1) of Section 3; (b) State does not include a Union territory; (c) Omitted. 3. Levy and collection of Additional Duties. - (1) There shall be levied and collected in respect of the goods described in column (3) of the First Schedule produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto duties of excise at the rate or rat s specified in column (4) of the e said Schedule. (2) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excise Act, 1944 (1 of 1944), or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944), and the rules made there under, including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to the levy

1

TAX LAW

TAX LAW

and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in subsection (1) 4. Distribution of additional duties among States. During each financial year, there shall be paid out of the Consolidated Fund of India to the States in accordance with the provisions of the Second Schedule such sums, representing a part of the net proceeds of the additional duties levied and collected during that financial year, as are specified in that Schedule. 5. Expenditure to be charged on the Consolidated Fund of India. Any expenditure under the provisions of this Act shall be expenditure charged on the Consolidated Fund of India. 6. Powers to make rules.(1) The Central Government may, by notification in the Official Gazette, make rules providing for the time at which and the manner in which any payments under the provisions of this Act, are to be made, for the making of adjustments between one financial year and another and for any other incidental or ancillary matters. (2) Every rule made under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule, or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule. 7. Declaration of certain goods to be of special importance in inter -State trade or commerce. Repealed by Act No. 31 of 1958, s.12 (w.e.f. 1.10.1958)

Additional Duties of Excise(Textiles and Textile Articles) Act, 1978 - Index

Sections

Additional Duties of Excise(Textiles and Textile Articles) Act, 1978

1. 2. 3. 4.

Short title and commencement Omitted Levy and collection of additional duties of excise on certain textiles and textile articles Repeal and saving

Schedule

1. Short title and commencement.(1) This Act may be called the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978. (2) It shall be deemed to have come into force on the 4th day of October, 1978.

2. Omitted

2

TAX LAW

TAX LAW

3. Levy and collection of additional duties of excise on certa in textiles and textile articles. (1) When goods of the description mentioned in the Schedule chargeable with a duty of excise under the Central Excise Act, 1944 (1 of 1944), read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable (not being a notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the said Act on such goods equal to, any duty of excise under the said Act, or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), already paid on the raw material used in the production or manufacture of such goods), are assessed to duty, there shall be levied and collected a duty of excise equal to fifteen per cent of the total amount so chargeable on such goods. (2) The duties of excise referred to in sub-section (1) in respect of the goods specified in the Schedule shall be in addition to the duties of excise chargeable on such goods under the Central Ex cise Act, 1944 (1 of 1944), or any other law for the time being in force and shall be levied for the purpose of Union and the proceeds thereof shall not be distributed among the States. (3) The provisions of the Central Excise Act, 1944 (1 of 1944), and the rules made thereunder, including those relating to refunds and exemptions from duties, shall, so far as may be, apply in relation to the levy and collection of the duties of excise leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules. 4. Repeal and saving. (1) The Additional Duties of Excise (Textiles and Textile Articles) Ordinance, 1978 (4 of 1978), is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act. THE SCHEDULE (See Section 3) NOTES 1. In this Schedule "Chapter" and "heading" mean a Chapter or heading in the Schedule to the Central Excise Tariff Act, 1985. 2. The rules for the interpretation of the Schedule to the Central Excise Tariff Act, 1985, and the Section and Chapter Notes of the said Schedule shall apply for the purposes of classification of goods specified in this Schedule.Sl. No. (1) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Description of goods (2) Silk, that is to say, all goods falling within Chapter 50. Wool, that is to say, all goods falling within Chapter 51 other than fabrics of heading Nos. 51.10,51.11 and 51.12. Cotton, that is to say, all goods falling within Chapter 52. Man-made filaments, that is to say, all goods falling within Chapter 54. Man-made staple fibres, that is to say, all goods falling within Chapter 55. Terry towelling and similar woven terry fabrics, falling within heading No. 58.02. Tulles and other net fabrics, not including woven, knitted or crocheted fabrics; lace in the piece, in strips or in motifs, other than fabrics of heading No. 60.02. Knitted or crocheted fabrics, that is to say, all goods falling within Chapter 60. Metallised yarn, falling within heading No. 56.05. Embroidery in the piece, in strips or in motifs, falling within heading No. 58.05.

Banking Cash Transaction Tax Rules, 2005

3

TAX LAW

TAX LAW

Sections Banking Cash Transaction Tax Rules, 2005

Notification

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Short title and commencement Definitions Maintenance of particulars of taxable banking transactions by the scheduled bank Payment of banking cash transaction tax Furnishing of statement by a scheduled bank of number of taxable banking transactions entered into and banking cash transaction tax collected during a month The return..... Return by whom to be signed Time limit to be specified in the notice calling for return of taxable banking transaction Notice of demand Prescribed time for refund of tax to the person from whom such amount was collected Form of appeal to Commissioner of Income -tax (Appeals) Form of appeal to Appellate Tribunal

Notification.- S.O. 737(E).- In exercise of the powers conferred by sub-section (1) read with subsection (2) of section 111 of the Finance Act, 2005 ( 18 of 2005), the Central Government hereby makes the following rules for carrying out the provisions of Chapter VII of the said Act relating to banking cash transaction tax, namely:-

1. Short title and commencement.- (1) These rules may be called the Banking Cash Transaction Tax Rules, 2005. (2) They shall come into force on the 1st day of June, 2005. 2. Definitions.- (1) In these rules, unless the context otherwise requires,(a) "Act" means the Finance Act, 2005 (18 of 2005); (b) "authorised bank" means any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934); (c) "Form" means a Form set out in the Appendix to these rules.

4

TAX LAW

TAX LAW

(2) Words and expressions used and not defined in these rules but defined in the Act, the Negotiable Instruments Act, 1881, the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the Income-tax Act, 1961, or the rules or regulations made thereunder shall have the meanings respectively assigned to them in those Acts or the rules or the regulations. 3. Maintenance of particulars of taxable banking transactions by the scheduled bank.- (1) Every branch of a scheduled bank shall keep and maintain in Form No. 1 the particulars of taxable banking transactions entered into in that branch. (2) Every branch of a scheduled bank which is maintaining its daily account on a computer media, shall keep and maintain the particulars as referred to in sub-rule (1), on a computer media.

4. Payment of banking cash transaction tax.- Every scheduled bank which is required to collect and pay banking cash transaction tax under section 97 of the Act, shall, in respect of all its branches, pay the amount of such tax to the credit of the Central Government by remitting it into any branch of the Reserve Bank of India or of the State Bank of India or of any authorised bank accompanied by a banking cash transaction tax challan5. Furnishing of statement by a scheduled bank of number of taxable banking transactions entered into and banking cash transaction tax collected during a month.- Every scheduled bank shall furnish a statement of taxable banking transactions in respect of which it is required to collect tax during a month, in Form No. 2 to the income tax authority specified in this behalf by the Board on or before the expiry of the month immediately following the said month on a computer media, in accordance with the following,(a) the computer media conforms to the following specifications:(i) CD ROM of 650 MB capacity or higher capacity; or (ii) 4mm 2GB/ 4GB (90M/ 120M) DAT Cartridge; or (iii) Digital Video Disc; (b) if the data relating to the schedules is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished; (c) the statement shall be accompanied by a certificate regarding clean and virus free data Return of taxable banking cash transactions.

6. The return.- (1) The return of taxable banking transactions required to be furnished under sub-section (1) of section 98 of the Act shall be in Form No. 3 and be verified in the manner indicated therein. (2) The particulars required to be furnished in the Schedules A and B to Form No. 3 referred to in sub-rule (1) shall be furnished on a computer media, in accordance with the following, (a) the computer media conforms to the following specifications:(i) CD ROM of 650 MB capacity or higher capacity; or (ii) 4mm 2GB/ 4GB (90M/ 120M) DAT Cartridge; or (iii) Digital Video Disc;

5

TAX LAW

TAX LAW

(b) if the data relating to the schedules is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished; (c) the return shall be accompanied by a certificate regarding clean and virus free data. (3) The return of taxable banking transactions entered into during a financial year shall be furnished on or before the 31st July immediately following that financial year. 7. Return by whom to be signed. - The return under sub-section (1) of section 98 of the Act shall be signed and verified (a) in the case of a scheduled bank, being a company, by the managing director or a director thereof; (b) in the case of a scheduled bank ,not being a company, by the principal officer thereof.

8. Time limit to be specified in the notice calling for return of taxable banking transaction.- Where an assessee fails to furnish the return under sub-section (1) of section 98 of the Act within the time specified in sub-rule (3) of rule 6, the Assessing Officer may issue a notice to such person requiring him to furnish, within thirty days from the date of service of the notice, a return in the Form prescribed in rule 6 and verified in the manner indicated therein9. Notice of demand.- Where any tax, interest or penalty is payable in consequence of any order passed under the provisions of Chapter VII of the Act, the Assessing Officer shall serve upon the assessee a notice of demand in Form No. 4 specifying the sum so payable.10. Prescribed time for refund of tax to the person from whom such amount was collected Every assessee, in case any .amount is refunded to it on assessment under sub-section (2) of section 99 of the Act, shall, within thirty days from the date of receipt of such amount, refund the same to the concerned person from whom it was collected.

11. Form of appeal to Commissioner of Income-tax (Appeals).- (1) An appeal under sub-section (1) of section 107 to the Commissioner (Appeals) shall be made in Form No. 5. (2) The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appended thereto relating to an assessee shall be signed and verified by the person who is authorised to sign the return of taxable banking transactions under rule 7. 12. Form of appeal to Appellate Tribunal. - An appeal under sub-section (1) or sub-section (2) of section 108 of the Act to the Appellate Tribunal shall be made in Form No. 6, and where the appeal is made by the assessee, the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in rule 7.

Capital Gains Accounts Scheme, 1988

Sections Capital Gains Accounts Scheme, 1988Notification

1.

Short title, commencement and application

6

TAX LAW

TAX LAW

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Definitions Deposits how to be made Types of deposits Application for opening account Issue of duplicate pass book or receipt Transfer and conversion of the account Interest Withdrawal from the account Utilisation of the amount of withdrawal Nomination by the depositor Charge or alienation Closure of the account

ANNEXURE

Notification.- GSR 724(E), DATED 22-6-1988 In exercise of the powers conferred by sub-section (2) of section 54, sub-section (2) of section 54B, sub-section (2) of section 54D, sub-section (4) of section 54F and sub-section (2) of section 54G of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby frames the following Scheme, namely:1. Short title, commencement and application.- (1) This Scheme may be called the Capital Gains Accounts Scheme, 1988. (2) It shall come into force on the date of its publication in the Official Gazette. (3) It applies to all assessees who are eligible for exemption under section 54, 54B, 54D, 54F or 54G of the Incometax Act, 1961 (43 of 1961). 2. Definitions.- In this Scheme, unless the context otherwise requires, (a) account means a deposit account under this Scheme; (b) account-A means deposit account-A mentioned in paragraph 4 of this Scheme; (c) account-B means deposit account-B mentioned in paragraph 4 of this Scheme; (d) Act means the Income-tax Act, 1961 (43 of 1961);

7

TAX LAW

TAX LAW

(e) Deposit Office means any branch or branch office of the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955) or of a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or of a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under section 3 of the Banking Co mpanies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), authorised by the Central Government, by notification in the Official Gazette, to receive deposit and maintain account of the depositor, under this Scheme; (f) depositor means an assessee who is eligible to make a deposit under section 54, 54B, 54D, 54F or 54G of this Act; (g) all other words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act; (h) Form means a form appended to this Scheme.

3. Deposits how to be made.- A deposit or deposits may be made under the provisions of section 54 or section 54B or section 54D or section 54F or section 54G of the Act by any depositor intending to avail of the benefit under the said section or sections of the Act, as the case may be, in accordance with the provisions of this Scheme. 4. Types of deposits.- (1) There shall be two types of deposit accounts, namely : (i) Deposit account-A; and (ii) Deposit account-B. (2) The deposit made under account-A shall be in the form of savings deposit and subject to the other provisions of this Scheme, withdrawals under this account can be made from time to time by the depositor. (3) The deposit made under account-B shall be in the form of term deposit with an option to the depositor to keep the deposit as cumulative or non-cumulative deposit. Except as provided under paragraph 7 and paragraph 9, withdrawals under this account can be made only after the expiry of the period for which the deposit under this account has been made and accepted. (4) Such deposits may be made in one lump sum or in instalments at any time on or before the due date of furnishing the return of income under sub-section (1) of section 139 of the Act as is applicable in the case of the depositor.5. Application for opening account.- (1) Every depositor who is desirous of opening an account or accounts, as the case may be, under this Scheme for the first time, shall apply to the deposit office in Form A or as near thereto as possible, in duplicat and e tender the amount of deposit payable in the manner specified in sub-paragraph (4) and a depositor intending to avail of the benefit under more than one section of the Act, as referred to in paragraph 3, shall make separate applications in the same manner, for opening account or accounts under each of such sections. (2) While applying under sub-paragraph (1) the depositor shall exercise his option as to whether the amount is to be deposited in account-A or in account-B or in both the accounts, and in case of the deposito exercising his option to open account-B, the r depositor shall also exercise his option as to whether the deposit is to be made as cumulative or non-cumulative deposit as referred in sub-paragraph (3) of paragraph 4. (3) On receipt of an application under sub-paragraph (1), the deposit office shall open an account or accounts in the name of the depositor as opted by him under sub-paragraph (2). (4) The payment of amount of deposit shall be made by the depositor either in cash or by crossed cheque or by draft along with the application. (5) Every subsequent deposit shall be made into the deposit office at which the account stands, in the same manner as stipula ted in sub-paragraph (4). (6) If the deposit is made by a cheque or a draft then, subject to such cheque or draft being realised, the effective date of deposit for the purpose of claiming exemption under the Act will be the date on which the cheque or draft is received by the deposit office along with the application under sub-paragraph (1) or sub-paragraph (5), as the case may be. (7) The interest on the amount of deposit shall accrue and will be calculated subject to the provisions of paragraph 8, with effect

8

TAX LAW

TAX LAW

from the date of deposit in cash or the date of realisation of the proceeds of the cheque or the draft tendered by the depositor. (8) In the case of deposit under account-A, the deposit office shall issue a pass book to the depositor wherein all amounts of deposits, withdrawals, together with interest due, shall be entered over the signature of the authorised officer of the deposit office. (9) In the case of deposit under account-B, deposit office shall issue a deposit receipt wherein the principal amount of deposit, date of deposit, date of maturity of deposit, shall be entered over the signature of the authorised officer of the deposit office.

6. Issue of duplicate pass book or receipt.- In the event of loss or destruction of the pass book receipt referred to in sub-paragraph (8) or sub-paragraph (9) of paragraph 5, the deposit office may, on an application made to it in this behalf, issue a duplicate thereof.

7. Transfer and conversion of the account.- (1) A depositor may, if he so desires, apply for transfer of his account or accounts, from one deposit office to another deposit office of the same bank. (2) A depositor having a deposit in account-B may, at any time, if he so desires, apply in Form-B or as near thereto as possible, together with his deposit receipt, for transfer of the amount standing to his credit in account-B to his deposit in account-A opened under the same section of the Act under which the said account B was opened and the request of the depositor may be accepted subject to the other provisions of this Scheme. (3) (a) A depositor while applying under sub-paragraph (2) shall furnish in Form B the requisite particulars of his account-A to which the amount from account-B is required to be transferred; (b) Where the depositor is not having a deposit in account-A, he shall state such fact and also make a request for opening an account-A in his name, as specified in Form B. (4) If the request under sub-paragraph (2) has been made for transfer of amount standing to the credit in account B, before the expiry of the specified period for which the deposit in account-B was made, such request shall be treated as premature withdrawal of amount from deposit in the said account-B and the amount of interest accrued, if any, in the said account-B shall be calculated by the deposit office in accordance with the provisions of sub-paragraph (4) of paragraph 8. (5) If the request under sub-paragraph (2) has been made for transfer of amount standing to the credit in account B on or after the expiry of the specified period for which the deposit in account-B was made, the amount of interest accrued in account-B shall be calculated at normal rate as specified by the Reserve Bank of India in pursuance of paragraph 8 in respect of a deposit in account-B. (6) On receipt of an application under sub-paragraph (2), the deposit office shall calculate the amount of interest, if any, accrued in account-B till the date on which actual transfer of amount to account A is made, subject to the provisions of paragraph 8 and close account-B after transferring the total amount standing to the credit in account-B to account-A: Provided that where in such case of transfer the depositor does not have a deposit in account A, an account-A shall be opened in the name of the depositor and the amount standing to his credit in account B shall then be transferred to account-A as so opened. (7) A depositor, if he so desires, may apply in Form B together with his pass book, for opening an account B in his name, by way of transfer of the whole or any part of the amount standing to his credit in account A, under the same section of the Act under which his account-A has been opened. (8) After the conversion of account-B to account-A or vice versa in the manner specified above, the interest in newly opened account or accounts, as the case may be, shall accrue with effect from the date of open of such account or ing accounts.

9

TAX LAW

TAX LAW

8. Interest.- (1) Interest at such rate as may be specified by the Reserve Bank of India, from time to time, shall be allowed for each calendar month on the lowest balance at the credit of a depositor under accountA, between the close of the 10th day and the end of the month and shall be credited to the account at the end of each half year. (2) Interest at such rate, as may be specified by the Reserve Bank of India, from time to time, shall be allowed in respect of deposit in account-B. In case of cumulative deposit in account-B, the amount of interest accrued will be deemed to have been reinvested and in case of non -cumulative deposit in account-B, the amount of interest will become due and payable at quarterly intervals. (3) Interest due at the end of each half year in respect of account-A will be credited only when the amount is Re. 1 or more and the total amount of interest payable in respect of account-A or account-B will be rounded off to the nearest five paise. (4) If a depositor applies under paragraph 7 or paragraph 9 or paragraph 13 for conversion of the account or withdrawal from the account or closure of the account, as the case may be, before completion of the period for which the deposit in account-B has been accepted by the deposit office, the rate of interest payable in respect of such deposit shall be the one applicable to the period for which the deposit remained with the deposit office less one per cent penalty for a premature withdrawal on account of such conversion or withdrawal or closure, as the case may be, and any adjustment required to be made on account of such premature conversion, withdrawal or closure with respect to amount of interest already credited to the account of the depositor, shall be made by the deposit office against the amount lying to the credit of the depositor in account-B. 9. Withdrawal from the account.- (1) A depositor having account-A may, at any time after making the initial subscription, if he so desires, apply in Form C or as near thereto as possible, together with the pass book to the deposit office for the withdrawal of amount from the balance to his credit in account-A, subject to the other provisions of this Scheme. (2) On receipt of an application under sub-paragraph (1) the deposit office shall, subject to the provisions of subparagraph (3), permit the withdrawal and enter the amount withdrawn in the pass book. (3) At the time of any withdrawal from account-A, other than the initial withdrawal, the depositor shall furnish in Form D in duplicate the details regarding the manner and extent of utilisation of the amount of immediately preceding withdrawal. The deposit office will retain one copy of Form D and return the other copy to the depositor after duly authenticating it. (4) Where the amount of withdrawal referred to in sub-paragraph (2) exceeds rupees twenty-five thousand, the deposit office shall make payment to the depositor, subject to the fulfilment of the conditions prescribed in sub-paragraph (3), by way of crossed demand draft drawn in favour of the person to whom the depositor intends to make the payment. (5) A depositor intending to make withdrawal from his deposit in account-B, shall first apply in the manner prescribed in sub-paragraph (2) of paragraph 7 for transfer of the amount standing to his credit in account-B to account-A and may withdraw the requisite amount in the same manner and subject to the same conditions as stipulated in sub paragraphs (1) and (3) after the amount standing to the credit in his account-B has been credited to his account-A by the deposit office. (6) In case the application under sub-paragraph (5) is made before the expiry of the specific period for which the deposit in account-B was made, such withdrawal will be treated as premature withdrawal, and the amount of interest accrued, if any, shall be calculated subject to the provisions of sub-paragraph (4) of paragraph 8. (7) On receipt of the application under sub-paragraph (5), the deposit office shall transfer the amount due and payable, together with the amount of interest accrued, in account-B, to account-A in the same manner and subject to the same conditions as stipulated in paragraph 7 and thereafter allow the request for withdrawal made by the

10

TAX LAW

TAX LAW

depositor in the same manner and subject to the same conditions as stipulated in sub-paragraphs (1), (2), (3) and (4). Explanation : For the removal of doubts, it is hereby clarified that the deposit office shall refuse the depositor to withdraw any amount lying in his account, in case of failure on his part to furnish all the details as required by subparagraph (3). 10. Utilisation of the amount of withdrawal. - (1) A depositor, withdrawing any amount out of the deposit made in pursuance of sub-section (2) of section 54 or sub-section (2) of section 54B or sub-section (2) of section 54D or subsection (4) of section 54F or sub-section (2) of section 54G, shall utilise the whole or any part of the amount so withdrawn for the purposes specified in sub-section (1) of the section in relation to which the deposit has been made. (2) The amount withdrawn shall be utilised by the depositor within sixty days from the date of such withdrawal for the purposes specified in sub-paragraph (1) and the amount or any part thereof which has not been so utilised shall be redeposited in account-A immediately thereafter.

11. Nomination by the depositor. - (1) A depositor may nominate in Form E or as near thereto as possible, one or more persons but not exceeding three to receive the amount standing to his credit in account A or account-B, as the case may be, in the event of his death before the amount has become payable or having be come payable, has not been paid. (2) No nominations shall be made in respect of an account opened on behalf of a minor or a Hindu undivided family or a firm or a company or an association of persons or a body of individuals. (3) A nomination made by a depositor may be varied by a fresh nomination in Form F or as near thereto as possible, by giving notice in writing to the deposit office in which the account stands. (4) Every nomination and every cancellation or variation thereof shall be registered in the deposit office and shall be effective from the date of such registration, the particulars of which in the case of a deposit in account A shall be entered in the pass book and in the case of a deposit in account B shall be entered in the deposit receipt issued by the deposit office. (5) If the nominee is a minor, the depositor may appoint any person to receive the amount due under the account in the event of the death of the depositor during the minority of the nominee. (6) Where the nomination is in favour of more than one person, the nominee first named shall alone have the right to receive the amount standing to the credit in the account of the deceased depositor. (7) Where the nominee first named has pre-deceased the depositor and the depositor has not cancelled the nomination or substituted the nomination, the nominee second named shall be entitled to receive the amount standing to the credit in the account of the deceased depositor and so on in respect of other successive nominees: Provided that if any nominee is dead, the surviving nominee or nominees shall, in addition to the proof of death of the depositor, also furnish proof of death of the deceased nominee or nominees, as the case may be. 12. Charge or alienation.- The amount standing to the credit of any depositor in any account shall not be placed or offered by him as security for any loan or guarantee and shall not be charged or alienated in any manner whatsoever.

13. Closure of the account.- (1) If a depositor desires to close his account, an application shall be made with the approval of the Assessing Officer who has jurisdiction over the depositor to the deposit office in Form G or as near thereto as possible, and the deposit office shall pay the amount of balance including interest accrued to the credit in , the account of the depositor by means of crediting such amount to any bank account of the depositor.

11

TAX LAW

TAX LAW

(2) If a depositor in respect of whose deposit account a nomination is in force, dies, the nominee, if he desires to close the account or accounts and obtain the payment of the balance standing to the credit in the account of the deceased depositor, shall make an application to the deposit office in Form H or as near thereto as possible with the approval of the Assessing Officer who has jurisdiction over the deceased depositor, and the deposit office shall pay the amount of balance standing to the credit in the account of the deceased depositor including amount of interest accrued, by means of crediting such amount to any bank account of the nominee. (3) If a depositor, in respect of whose deposit no nomination is in force, the legal heir of the deceased depositor shall make an application to the deposit office in Form H or as near thereto as possible, with the approval of the Assessing Officer who has jurisdiction over the deceased depositor, and the deposit office shall pay the balance standing to the credit in the account of the deceased depositor including the amount of interest accrued, by means of crediting such amount to any bank account of the legal heir : Provided that where there are more than one legal heir of the deceased depositor, the legal heir making the claim individually may do so by producing the letter of disclaimer or letter of authorisation from other legal heirs in his favour : Provided further that before granting the approval for closure of the account under this sub-paragraph, the Assessing Officer shall obtain from the legal heir a succession certificate issued under Part V of the Indian Succession Act, 1925, or a probate of the will of the deceased depositor, if any, or letter of administration to the estate of the deceased in case there is no will in order to verify the claim of such legal heir to the account of the deceased depositor. (4) The depositor or the nominee or the legal heir, in order to obtain payment of the amount standing to the credit in the account shall while applying in Form G or Form H, also submit the pass book of account-A or deposit receipt of account-B, as the case may be, to the deposit office. (5) The payment made by the deposit office to the depositor or the nominee or the legal heir in accordance with the provisions of this paragraph shall constitute a full discharge to the deposit office of its liability in respect of the deposit. (6) Nothing contained in this paragraph or in paragraph 11 shall affect the right or claim which any person may have against the person to whom any payment is made under this paragraph. ANNEXURE Capital Gains Accounts Scheme, 1988 - Notification under paragraph 2(e) - Banks authorised to receive deposits under the Scheme In pursuance of clause (e) of paragraph 2 of the Capital Gains Accounts Scheme, 1988, the Central Government hereby authorises all the branches (except rural branches) of the banks specified in column (2) of the Table below to receive deposits and maintain accounts, under the said Scheme: TABLESl. No. 1. 2. 3. 4. 5. 6. Name of the Bank State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala

12

TAX LAW

TAX LAW

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.

State Bank of Saurashtra State Bank of Travancore Central Bank of India Bank of India Punjab National Bank Bank of Baroda UCO Bank Canara Bank United Bank of India Dena Bank Syndicate Bank Union Bank of India Allahabad Bank Indian Bank Bank of Maharashtra Indian Overseas Bank Andhra Bank Corporation Bank New Bank of India Oriental Bank of Commerce Punjab & Sind Bank Vijaya Bank

Explanation : For the purposes of this notification, a rural branch, in relation to the bank specified in column (2) of the Table, means a branch which is situate and is functioning at a centre, the population whereof, in accordance with the 1981 census, is less than ten thousand.

Central Duties of Excise (Retrospective Exemption) Act, 1986 - Index

Sections Central Duties of Excise (Retrospective Exemption) Act, 1986Preamble

1. 2.

Short title Retrospective effect for certain notifications

Preamble.- An Act to provide for giving retrospective effect to certain Notifications relating to exemption from duties of excise. BE it enacted by Parliament in the Thirty-seventh Year of the Republic of India as follows :1. Short title.- This Act may be called the Central Duties of Excise (Retrospective Exemption) Act, 1986. 2. Retrospective effect for certain notifications.- (1) Every notification is- sued by the Government of India in the

13

TAX LAW

TAX LAW

Ministry of Finance (Department of Revenue) on or after the 3rd day of March, 1986, but before the 8th day of August, 1986, in exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, for the purpose of,(a) maintaining the effective rates of duties of excise in respect of certain goods at the level obtaining prior to the 28th day of February, 19~ notwithstanding the changes in the rates of duties of excise made by the Central Excise Tariff Act, 1985 (5 of 1986), the Additional Duties of Excise (Textiles and Textile Articles) Amendment Act, 1985 (6 of 1986), or the Additional Duties of Excise (Goods of Special Importance) Amendment Act, 1985 (7 of 1986); or (b) maintaining the effective rates of duties of excise in respect of certain goods at the level obtaining prior to 1st day of March, 1986 not- withstanding the changes in the rates of duties of excise made by the Finance Bill, 1986, shall, insofar as such notification relates to such goods, be deemed to have, and to have always had, effect on and from the 1st day of March, 1986. (2) The duties of excise which have been collected, but which would not have been so collected if the said notification had been in force at all material times, shall be refunded : Provided that no such refund shall be allowed where credit of the duties of excise has been taken under rule 56A or, as the case may be, rule 57 A of the Central Excise Rules, 1944, or where the goods on which the duties of excise have been paid have been exported under a claim for rebate of such duties. (3) The duties of excise which have become payable, but which would not have been so payable if the said notification had been in force at all material times, shall not be required to be paid. (4) Any person claiming refund of any duty of excise under sub-section (2) may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the commencement of this Act.

Central Excise (Advance Rulings) Rules, 2002

Sections Central Excise (Advance Rulings) Rules, 2002

1. 2. 3. 4.

Short Title, extent and commencement Definitions Form and manner of application Certification of copies of the advance rulings pronounced by the Authority

FORM- AAR (CE-I) ANNEXURE I ANNEXURE II

14

TAX LAW

TAX LAW

1. Short Title, extent and commencement.- (1) These rules may be called the Central Excise (Advance Rulings) Amendment Rules, 2002. (2) They extend to the whole of India. (3) They shall come into force on the date of their publication in the Official Gazette. 2. Definitions.- In these rules, unless the context otherwise requires,(a) Act means the Central Excise Act, 1944 (1 of 1944); (b) Authority means the Authority for Advance Rulings (Central Excise, Customs and Service Tax) constituted under section 28F of the Customs Act, 1962 (52 of 1962). (c) Form- Application for Advance Ruling (Central Excise) means the form annexed to these rules. (d) Words and expressions used and not defined herein but defined in the Act, shall have the meaning respectively, assigned to them, in the Act. 3. Form and manner of application. - (1) An application for obtaining an advance ruling under sub-section (1) of section 23C of the Act shall be made in Form - Application for Advance Ruling (Central Excise). (2) The application referred to in sub-rule (1), the verification contained therein and all relevant documents accompanying such application shall be signed, (a) in the case of an individual, by the individual himself, or where the individual is absent from India, by the individual concerned or by some person duly authorized by him in this behalf, and where the individual is a minor or is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf; (b) in the case of a Hindu undivided family, by the Karta of that family and, where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of that family; (c) in the case of a company or local authority, by the principal officer thereof authorized by the company or the local authority, as the case may be, for such purpose; (d) in the case of a firm, by any partner thereof, not being a minor; (e) in the case of an association, by any member of the association or the principal officer thereof; and (f) in the case of any other person, by that person or some person competent to act on his behalf. (3) Every application shall be filed in quadruplicate and shall be accompanied by a fee of two thousand five hundred rupees.

4. Certification of copies of the advance rulings pronounced by the Authority. - A copy of the advance ruling pronounced by the Authority for Advance Rulings and duly signed by the Members to be sent to each of the applicant and to the Commissioner of Central Excise, under sub-section (7) of section 23D of the Act, shall be certified to be true copy of its original by the Commissioner, Authority for Advance Rulings, or any other officer duly authorized by the Commissioner, Authority for Advance Rulings, as the case may be.

15

TAX LAW

TAX LAW

FORM- AAR (CE-I) Application for Advance Ruling (Central Excise) (See rule 3 of the Central Excise (Advance Rulings) Rules, 2002) BEFORE THE AUTHORITY FOR ADVANCE RULINGS (CENTRAL EXCISE, CUSTOMS AND SERVICE TAX) NEW DELHI (Form of application for seeking Advance Ruling under section 23C of the Central Excise Act,1944) Application No.of.1. Details of Applicant (i) Full name : (ii) Complete address : (iii) Telephone number( with STD/ISD code) : (iv) Fax number (with STD/ISD code) : (v) E-mail address : (vi) Postal address ( to be provided if different : from (ii) above) Status of the Applicant (Tick whichever is applicable) (i) a non-resident setting up a joint venture in : India in collaboration with,(a) a non-resident; or (b) with a resident; (ii) a resident setting up a joint venture in India : in collaboration with a non-resident; (iii) a wholly owned subsidiary Indian company, : of which the holding company is a foreign company; (iv) a joint venture in India; : (v) a resident falling within any such class or : category of persons, as the Central Government may, by notification in the Official Gazette, specify in this behalf(mention notification number). Basis for claim as a proposed joint venture ref. 2(i) & (ii) above (furnish copy of following). (a) Memorandum of : Understanding; or (b) Letter of Intent; or (c) Articles of Association etc.; or (d) Any other document. Details of proposed joint venture

2.

3.

: : :

4.

16

TAX LAW

TAX LAW

5.

6. A.

B. 7.

8. 9. 10.

11. 12.

(i) Full name : (ii) Complete address : (iii) Telephone number( with STD/ISD code) : (iv) Fax number (with STD/ISD code) : (v) E-mail address (vi) Postal address( to be filled if different from : (ii) above) Details of resident/non-resident party other than the applicant forming the Joint Venture (i) Full name : (ii) Complete address : (iii) Telephone number( with STD/ISD code) : (iv) Fax number (with STD/ISD code) : (v) E-mail address : (vi) Postal address( to be filled if different from : (ii) above) In case of a wholly owned Indian Subsidiary Company furnish the following details:(i) Name of Foreign holding company : (ii) Complete address : (iii) Telephone number( with STD/ISD code) : (iv) Fax number (with STD/ISD code) : (v) E-mail address : (vi) Postal address ( to be provided if different : from (ii) above) Percentage of Foreign holding in the Indian : Subsidiary Company. In case of a joint venture ref. 2(iv) above (i) The persons forming the joint venture/ : constitution of joint venture. (ii) Status of constituent persons, i.e. : resident/non-resident. (iii) Existing activities if any. : Nature of activity proposed to be undertaken. : Present status of activity. : Registration number of the applicant as : mentioned at serial number 1 under rule 9 of the Central Excise Rules, 2002 (if any). Permanent Account Number (Income Tax) of : the applicant (if any). Question of Law or fact on which Advance Ruling required (Tick whichever is applicable and provide details against ticked item):(i) classification of goods under the Central : Excise Tariff Act, 1985( 5 of 1986); (ii) applicability of a notification issued under: sub-section (1) of section 5A of the Central Excise Act,1944, having a bearing on the rate of duty; (iii) the principles to be adopted for the purposes : of determination of value of the goods under the provisions of this Act; (iv) notifications issued, in respect of duties of : excise under the Central Excise Act,1944, the Central Excise Tariff Act, 1985 and any duty

17

TAX LAW

TAX LAW

13. 14.

15.

16.

17.

18.

19.

chargeable under any other law for the time being in force in the same manner as duty of excise leviable under this Act; (v) admissibility of credit of excise duty paid or deemed to have been paid on the goods in or in relation to the manufacture of the excisable goods (CENVAT); (vi) determination of liability to pay duties of excise under this Act. Statement of relevant facts having a bearing : on the question(s) raised. Statement containing the applicants : interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicants view point and submissions on issues on which the advance ruling is sought). Whether the question(s) raised is pending in : the applicants case before any officer of Central Excise, Appellate Tribunal or any Court of Law? If so, provide details. Whether a similar matter as raised in the : question(s) by the applicant has already been decided by the Appellate Tribunal or any Court? Concerned Commissioner(s) of Central : Excise having jurisdiction in respect of the question referred at serial number 12. List of documents/statement attached, : (attach the list on a separate sheet, if necessary. Particulars of account payee demand draft : enclosed with the application

(Applicants signature) VERIFICATION I, ____________________ (name in full and in block letters), son/daughter/wife of ___________________ do hereby solemnly declare that to the best of my knowledge and belief what is stated above and in the annexure(s), including the documents are correct. I am making this application in my capacity as ___________________ (designation) and that I am competent to make this application and verify it. 2. I also declare that the question (s) on which the advance ruling is sought is/are not pending in my case before any Central Excise Authority, Appellate Tribunal or any Court. 3. Verified this.day..of.200 at . (Applicants signature)

ANNEXURE I

18

TAX LAW

TAX LAW

Statement of the relevant facts having a bearing on the question(s) on which the advance ruling is required Place .. Date (Applicants signature) ANNEXURE II Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the questions(s) on which advance ruling is required Place .. Date (Applicants signature) Notes:1. The application must be filled in English or Hindi, in quadruplicate. 2. The application must be accompanied by an account payee demand draft of Indian Rupees two thousand five hundred drawn in favour of Authority for Advance Rulings(Central Excise, Customs & Service Tax), payable at New Delhi. Particulars of the draft should be entered in the column pertaining to item number 19. 3. The number and year of receipt of the application will be filled in by the office of the Authority for Advance Rulings. 4. If the space provided for answering any item in the application is found insufficient, separate sheets may be used for this purpose. Each sheet must be signed at the bottom by the applicant. 5. In reply to item number 2 the applicant must state its status i.e. whether an individual, Hindu undivided family firm, company, firm association of persons, wholly owned subsidiary, Joint Venture or any other person. 6. For item number 5, the reply must be given in the context of the provisions regarding 'residence' in India, non resident, Indian Company, and Foreign Company as per the Income Tax Act, 1961(43 of 1961). 7. In reply to item number 9, the applicant must state the present status of the business activity in respect of which advance ruling has been sought i.e. the stage to which it has progressed. 8. Regarding item number 12, the question(s) should be based on the activity proposed to be under taken; hypothetical questions will not be entertained. 9. In respect of item number 13, the applicant must state in detail the relevant facts and also disclose the nature of proposed activity and the likely date and purpose of the proposed activity(s). Relevant facts reflected in document submitted along with the application must be included in the statement of facts and not merely incorporated by reference. 10. For item number 14, the applicant must clearly state his interpretation of law or facts in respect of the question(s) on which the advance ruling is being sought. 11. The application, the verification appended thereto, the Annexures to the application and the statements and documents accompanying the Annexures 1 and 2 must be signed on each page by the applicant.

Central Excise Laws (Amendment & Validation) Act, 1982 - Index

Sections Central Excise Laws (Amendment & Validation) Act, 1982Preamble

19

TAX LAW

TAX LAW

1. 2. 3.

Short title and commencement Provisions as to exemption from duty of excise or fixing rate of such duty under certain Central laws and validation Repeal and saving

Preamble.- An Act to provide for the amendment of laws relating to Central Excise and to validate duties of excise collected under such laws. BE it enacted by Parliament in the Thirty-third Year of the Republic of India as follows :1. Short title and commencement. -(1) This Act may be called the Central Excise Laws (Amendment and Validation) Act, 1982. (2) It shall be deemed to have come into force on the date of commencement of the Central Excise Act, 1944 (1 of 1944). 2. Provisions as to exemption from duty of excise or fixing rate of such duty under certain Central laws and validation. -(1) In this section, (a) "Central Excises Act" means the Central Excise Act, 1944 (1 of 1944); (b) "Central Law" means a Central Act other than the Central Excises Act and includes a declared provision within the meaning of section 2 the provisional Collection of Taxes Act, 1931 (16 of 1931); (c) "exemption", in relation to any duty of excise, means exemption from the whole or any part of such duty; (d) "preamble", in relation to any notification or order, means that part the notification or order which refers to the powers in exercise or pursuance of which such notification or order is issued or made. (2) Every Central law providing for the levy and collection of any duty of excise which makes the provisions of the Central Excises Act and the rules made thereunder applicable by reference to the levy and collection of the duty of excise under such Central law shall have, and shall be deemed always to have had, effect with respect to the matters dealt within sub-section (3) in the manner provide that sub-section and this Act shall be construed as one with such Central law . (3) Where any Central law providing for the levy and collection of any duty of excise makes the provisions of the Central Excises Act and the rules II thereunder applicable by reference to the levy and collection of the duty of e) under such Central law , then, (a) it shall be necessary for the purpose of granting, by any notification order, any exemption from any duty of excise, or fixing, by any notification or order, any rate of duty, leviable under such Central la expressly refer to the provisions of the said Central law in the "preamble to such notification or order, or to state by express words in notification or order that the exemption provided for, or the rate of fixed, by such notification or order is an exemption from, or the rate of duty under, such Central law; (b) no notification or order issued or made under the Central Excises Act or the said rules (whether issued or made before, on or after the 24th day of September, 1982 and whether or not in force on such date) granting any exemption from any duty of excise or fixing any rate of such duty shall have the effect of, or be construed as, providing for exemption from the duty of excise leviable, or, as the case may be, fixing the rate of duty, under the said

20

TAX LAW

TAX LAW

Central law, unless such notification or order (i) expressly refers to the provisions of the said Central law in the preamble; or (ii) by express words, provides for an exemption from the duty of excise leviable, or, as the case may be, fixes the rate of duty under the said Central law; and (c) every notification or order of the nature referred to in clause (b) which expressly refers to the provisions of any Central law or Central laws in the preamble, shall have the effect of, and be construed as, providing for exemption from the duty of excise leviable, or, as the case may be, fixing a rate of duty, only under such Central law or Central laws, unless such notification or order also, by express words, provides for an exemption from the duty of excise leviable, or, as the case may be, fixes the rate of duty, under the Central Excises Act. (4) Every notification or order granting any exemption or fixing a rate of duty issued or made under the Central Excises Act or the rules made thereunder at any time whatsoever before the 24th day of September, 1982 shall have, and shall deemed always to have had, effect for all purposes as if the foregoing provisions of this section had been in force at all material times and accordingly, notwithstanding any judgment, decree or order of any court, tribunal or other authority, any action or thing taken or done, or purporting to have been taken or done, under the Central Excises Act or the said rules or any Central law in any case by virtue of such notification or order shall be deemed to be, and to have always been, for all purposes as validly and effectively taken or done as if the foregoing provisions of this section had been in force at all material times, and, notwithstanding anything as aforesaid and without prejudice to the generality of the foregoing,(a) all duties of excise levied, assessed or collected with respect to any goods under the Central Excises Act or the said rules or any Central law shall be deemed to be, and shall be deemed always to have been, vali levied, dly assessed or collected as if the foregoing provisions of this section had been in force at all material times. (b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of, any decree or order directing the refund of, any such duties of excise which have been collected and which would have been validly collected if the foregoing provisions of this section had been in force at all material times. (c) Refunds shall be made of all such duties of excise which have been collected but which would not have been collected if the foregoing provisions of this section had been in force at all material times; and (d) recoveries shall be made of all such duties of excise which have not been collected or, as the case may be which have been refunded but which would have been collected or, as the case may be, would not have been refunded if the foregoing provisions of this section had been refunded if the foregoing provisions of this section had been in force at all material times. (5) For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this Act had not come into force. 3. Repeal and saving. -(1) The Central Excise Laws (Amendment and validation) Ordinance, 1982 (1 of 1982) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken under he said Ordinance shall be deemed to have been done or taken under the : corresponding provisions of this Act.

CENVAT Credit Rules, 2004

21

TAX LAW

TAX LAW

Sections CENVAT Credit Rules, 2004

1. 2. 3. 4. 5. 6. 7. 8. 9. 9A. 10. 11. 12. 13. 14. 15. 16.

Short title, extent and commencement Definitions CENVAT credit Conditions for allowing CENVAT credit Refund of CENVAT credit Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services Manner of distribution of credit by input service distributor Storage of input outside the factory of the manufacturer Documents and accounts Information relating to princ ipal inputs Transfer of CENVAT credit Transitional provision 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 Power of Central Government to notify goods for deemed CENVAT credit Recovery of CENVAT credit wrongly taken or erroneously refunded Confiscation and penalty Supplementary provision

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,-

22

TAX LAW

TAX LAW

(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 subclauses (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;

23

TAX LAW

TAX LAW

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 expression provider and provided shall s be construed accordingly;

24

TAX LAW

TAX LAW

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-

25

TAX LAW

TAX LAW

(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;

26

TAX LAW

TAX LAW

(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 peri d not exceeding 180 days as may be permitted by the o 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 hund red per cent. exportoriented 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. 23/2003Central 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.

27

TAX LAW

TAX LAW

(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 utilized 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

28

TAX LAW

TAX LAW

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 Income tax 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 job worker 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

29

TAX LAW

TAX LAW

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 interme diate 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

30

TAX LAW

TAX LAW

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 t