CHAPTER-HEADS. Contents I-7 Rule-wise Index I-25

CHAPTER-HEADS Contents I-7 Rule-wise Index I-25 CHAPTER 1 : CENVAT CREDIT SCHEME 1 CHAPTER 2 : RULE 2 : DEFINITIONS 12 CHAPTER 3 : RULE 2 : CAPITAL GOODS 28 CHAPTER 4 : RULE 2 : INPUTS 62 CHAPTER 5 : RULE 2 : INPUT SERVICE 84 CHAPTER 6 : RULE 3 : CENVAT CREDIT 121 CHAPTER 7 : RULE 4 : CONDITIONS FOR ALLOWING CENVAT CREDIT 192 CHAPTER 8 : RULES 5, 5A AND 5B : REFUND OF CENVAT CREDIT 228 CHAPTER 9 : RULE 6 : OBLIGATION OF A MANUFACTURER OR PRODUCER FINAL PRODUCTS AND A PROVIDER OF TAXABLE SERVICE 259 CHAPTER 10 : RULES 7 & 7A : DISTRIBUTION OF CREDIT BY INPUT SERVICE DISTRIBUTOR 342 CHAPTER 11 : RULE 8 : STORAGE OF INPUT OUTSIDE THE FAC- TORY OF THE MANUFACTURER 353 CHAPTER 12 : RULE 9 : DOCUMENTS, ACCOUNTS AND RETURNS 358 CHAPTER 13 : RULE 9 : INVOICES OF DEALERS 405 CHAPTER 14 : RULE 9A : INFORMATION RELATING TO PRINCIPAL INPUTS 421 CHAPTER 15 : RULES 10 & 10A : TRANSFER OF CENVAT CREDIT 431 CHAPTER 16 : RULE 11 : TRANSITIONAL PROVISION 439 CHAPTER 17 : RULE 12 : SPECIAL PROVISIONS FOR NORTH-EAST REGION, KUTCH DISTRICT OF GUJARAT, STATE OF JAMMU AND KASHMIR AND STATE OF SIKKIM 443 CHAPTER 18 : RULE 12A : PROCEDURE AND FACILITIES FOR LARGE TAXPAYER 446 CHAPTER 19 : RULE 12AAA : POWER TO IMPOSE RESTRICTIONS IN CERTAIN TYPES OF CASES 472 CHAPTER 20 : RULE 13 : DEEMED CREDIT 487 CHAPTER 21 : RULE 14 : RECOVERY OF CENVAT CREDIT WRONGLY TAKEN OR ERRONEOUSLY REFUNDED 489 CHAPTER 22 : RULES 15 AND 15A : CONFISCATION AND PENALTY/ GENERAL PENALTY 498 CHAPTER 23 : RULE 16 : SUPPLEMENTARY PROVISION 507 CHAPTER 24 : JOB WORK 509 CHAPTER 25 : ACCOUNTING, INVENTORY VALUATION AND CENVAT 548 APPENDIX Cenvat Credit Rules, 2004 563 PAGE

Validation provisions pertaining to Cenvat Credit Rules 608 Central Excise Rules, 2002 631 SUBJECT INDEX 665 LIST OF CIRCULARS/TRADE NOTICES 675 LIST OF BASE NOTIFICATIONS 677 CONTENTS Chapter-heads I-5 Rule-wise Index I-25 PAGE 1 CENVAT CREDIT SCHEME 1.1 Background of VAT 1 1.1-1 Reply to queries 3 1.2 Basic Concept of VAT 3 1.2-1 Tax credit system to remove cascading effect 4 1.2-2 VAT is consumption based tax 5 1.2-3 Advantages of VAT 5 1.2-4 Disadvantages of VAT 6 1.3 Cenvat Scheme, 2004 6 1.4 Highlights of Cenvat Scheme 7 2 RULE 2 : DEFINITIONS Text of rule 2 12 2.1 Classification of the definitions 21 2.2 Customs Tariff Act 22 2.3 Excise Act 22 2.4 Excise Tariff Act 22 2.5 Finance Act 22 2.6 Manufacturer or producer 22 2.7 Notification 23 2.8 Residual clause 23 2.9 Exempted goods 23 2.10 Final products 23 2.10-1 Excisable goods 23 2.10-2 Element of manufacture must be present 24 2.10-3 Manufacture as defined by Court - New substance having distinct name, character or use must emerge 25 2.11 Output Service 26 2.12 Person liable for paying service tax 26

2.13 Provider of taxable service 27 3 RULE 2 : CAPITAL GOODS 3.1 Cenvat credit of duty paid on Capital goods 28 3.1-1 Highlights of definition of capital goods 30 3.1-2 Eligibility of capital goods 37 3.1-3 Eligibility of certain motor vehicles and its components, spares and accessories as capital goods 39 3.1-4 Capital goods used exclusively for exempted final products and output services not eligible 41 3.1-5 Capital goods does not cover equipment or appliance used in office for manufacturer 43 3.1-6 Goods imported under project imports 43 3.2 General provisions in respect of capital goods 44 3.2-1 Ownership of capital goods is not essential to avail Cenvat on capital goods 45 3.2-2 Use of capital goods by manufacturer 46 3.2-3 Capital goods extended from factory are eligible 49 3.2-4 Reversal of Cenvat credit in respect of obsolete capital goods written off without use 49 3.2-5 Capital goods manufactured within the factory 50 3.3 Capital goods used by Service provider 51 3.4 Conditions for availing Credit on Capital Goods 51 3.4-1 Cenvat credit on capital goods has to be availed in two stages, except by SSI 53 3.4-2 Capital goods used in EPC project 55 Annex 3.1 Cenvat Credit on Capital Goods used in manufacture of exempt intermediate goods 57 Annex 3.2 Items used in Ceramic Tiles Industry 58 Annex 3.3 Exemption to goods captively consumed within factory 59 Annex 3.4 Availability of Cenvat credit on inputs used in the manufac- ture of capital goods 61 4 RULE 2 : INPUTS 4.1 Input goods eligible for Cenvat credit 62 4.1-1 Inputs for construction excluded under exclusion clause (B) except when used for works contract or construction service 63 4.1-2 Condition of use of input in factory for manufacturer but not applicable to service providers 64 4.1-3 Capital goods are not inputs but parts and components can be inputs 65 4.1-4 Capital goods not defined as capital goods will be eligible as inputs 65

4.1-5 Motor vehicle is not input but capital goods in case of some services 65 4.1-6 Goods for personal consumption of employees not eligible 66 4.1-7 Goods used for captive generation of electricity or steam eligible but not HSD, LDO, Petrol 66 4.1-8 Goods having no relationship with manufacture of final product not eligible 66 4.1-9 Inputs directly sent to site and fitted there are eligible as input 67 4.1-10 Input goods in respect of service providers 67 4.2 Other provisions relating to input 68 4.2-1 Partial or full write off of inputs 68 4.2-2 Storage of inputs outside the factory 69 4.2-3 Input Credit Distributor 70 4.2-4 Clearance of packing material in which inputs were packed 70 4.2-5 Clearance of waste by service provider 72 4.3 Case law under earlier definition which is still relevant 72 4.3-1 Process losses and handling loss are allowable 72 4.3-2 No credit on short received inputs 74 4.4 Statutory definition of input upto 31-3-2011 75 Annex 4.1 Admissibility of CENVAT credit on inputs and capital goods used by the manufacturer outside the factory premises 76 Annex 4.2 Clarification on issues relating to definition of input as substituted with effect from 1-4-2011 78 Annex 4.3 Reversal of credit when value of work-in-progress or finished goods is written off 81 Annex 4.4 Payment of duty on waste package/containers used for packing modvatable inputs when cleared from the factory of the manufacturer availing Modvat/Cenvat credit 82 Annex 4.5 Tolerance limit of breakage of bottles due to handling during storage and clearance 83 5 RULE 2 : INPUT SERVICE 5.1 Input Services eligible for Cenvat credit 84 5.1-1 Analysis of the definition 86 5.1-2 Meaning of includes 86 5.1-3 Meaning of in relation to 87 5.1-4 Services covered in inclusive part of the definition 88 5.1-5 Cenvat credit of service tax paid on imported services 89 5.2 Place of removal 89 5.2-1 Place where ownership gets transferred to buyer is place of removal, when there is direct sale from factory 90 5.3 Services specifically excluded from definition of input service 93 5.3-1 Construction related Services specifically excluded under clause (A) 93

5.3-2 Renting of Motor Vehicle Services specifically excluded under clause (B) 94 5.3-3 Motor vehicle insurance and repair related Services specifically excluded under clause (BA) 96 5.3-4 Services for personal use or consumption of employees specifically excluded under clause (C) 97 5.3-5 What is wasteful expenditure as per the revised definition of input service 98 5.3-6 Services provided before 1-4-2011 but invoice raised on or after 1-4-2011 99 5.3-7 Case law relating to specific services 98 5.4 Eligibility of various services as input services 99 5.5 Cenvat Credit of input service on receipt of invoice of service provider 106 5.5-1 Deduction of some amount from invoice of service provider 107 5.5-2 Provisions as applicable upto 31-3-2011 108 5.6 Definition of input service upto 31-3-2011 110 Annex 5.1 Service tax credit on transportation of goods from factory to depot 111 Annex 5.2 Certain issues relating to Transport of goods by Road Service 113 Annex 5.3 Service tax credit on imported services 114 Annex 5.4 Clarification regarding availment of credit on input services 117 Annex 5.5 Annex 5.6 Classification of structural components of boiler and admissibility of Cenvat credit on these structural components-i 119 Classification of structural components of boiler and admissibility of Cenvat credit on these structural components-ii 120 6 RULE 3 : CENVAT CREDIT Text of rule 3 121 6.1 Eligibility of Cenvat Credit 135 6.1-1 Meaning of Cenvat Credit 136 6.1-2 Other duties specified but not relevant 138 6.1-3 Some issues relating to eligibility of Cenvat credit 139 6.2 Cenvat Credit when product ceases to be exempted goods or service seizes to be exempted service 139 6.2-1 Opting for Cenvat by SSI 140 6.2-2 Simultaneous availment of Cenvat and SSI exemption permissible when SSI manufacturing with other s brand name but not in other cases 141 6.3 Utilisation of credit 143 6.3-1 Utilisation of Cenvat credit 144 6.3-2 Time limit for taking Credit 145 6.3-3 Carry forward of Unutilised Cenvat credit 145 6.3-4 Full credit available in case of goods obtained from North Eastern States, J&K, Sikkim and Kutch district 145

6.3-5 Cenvat credit only of inputs received upto end of month, even if duty/tax is to be paid by 5th/6th of following month 146 6.3-6 Inter-changeability of Cenvat credit 146 6.3-7 Cenvat credit by exempted units from North Eastern States, J&K, Sikkim and Kutch district 147 6.3-8 Cenvat Credit cannot be utilised for payment of service tax when tax is payable under reverse charge method 147 6.4 Removal of inputs and capital goods on which Cenvat was taken 147 6.4-1 Removal of inputs after processing 151 6.4-2 Mode of payment of amount 152 6.4-3 Inputs/capital goods can be exported without payment of amount 152 6.4-4 Inputs can be cleared for export on payment of duty and rebate claimed 152 6.4-5 If inputs were obtained without payment of duty, final product cannot be exported on payment of duty and rebate claimed 153 6.4-6 Recovery if the amount not paid 153 6.5 Removal of capital goods after use 153 6.5-1 Provision as existing during 13-11-2007 to 31-3-2012 157 6.6 Restrictions on Cenvat credit in certain cases 158 6.6-1 Restrictions on utilisation of credit of some duties 160 6.6-2 Cenvat Credit in respect of goods procured from EOU 161 6.6-3 Cenvat of CVD and special CVD if duty paid through Duty Credit Scrip, DEPB 164 6.7 Other Issues relating to availment of Cenvat Credit 165 6.7-1 One to one correlation not necessary in Cenvat 165 6.7-2 Classification/Duty liability cannot be altered or challenged at the end of user of inputs 166 6.7-3 Full credit of duty paid by supplier is available, even if less duty was payable or not payable 167 6.7-4 Full Cenvat credit of duty paid available even if seller gave trade discount or price reduction later 168 6.7-5 Buyer can avail Cenvat credit, if supplier paid duty higher than what was payable or when not payable 170 6.7-6 Registration and eligibility of Cenvat credit are 6.7-7 Cenvat provisions and valuation provisions are independent issues 172 6.7-8 Transfer of credit of SAD from one factory to other 173 independent 173 6.7-9 Accounting entries not relevant for eligibility of Cenvat credit 174 6.8 Reversal of Cenvat Credit 174 6.8-1 Reversal if final product subsequently exempt 175 6.9 No reversal of Cenvat credit in certain cases 176 6.9-1 No reversal if supplier gives reduction in price after clearance 177 6.9-2 No Cenvat reversal if duty paid on final product, even if it was not payable 177

6.10 Cenvat available as input but availed as capital goods and vice versa 181 6.11 Cenvat credit if demand made on final products for past period 182 Annex 6.1 Availing of Cenvat credit of Additional Customs Duty (CVD) paid through Duty Free Credit Entitlement (DFCE)/Target Plus Scheme (TPS) Certificates 184 Annex 6.2 Rule 3 of the Cenvat Credit Rules, 2004 - Cenvat credit - Irregular availment of Cenvat credit on certain activities not amounting to manufacture 186 Annex 6.3 Allowability on credit on duty paid on exempted goods 187 Annex 6.4 Non-reversal of credit in case of wire drawing 188 Annex 6.5 Reversal of credit when supplier allows discount or reduces the price 189 Annex 6.6 Utilisation of Cenvat credit in respect of inputs on which credit is availed but the inputs are exported as such under bond 190 Annex 6.7 Payment of arrears from Cenvat credit earned at a later date 191 7 RULE 4 : CONDITIONS FOR ALLOWING CENVAT CREDIT Text of rule 4 192 7.1 Time limit for taking Credit of duty paid on inputs 197 7.2 Availment of Cenvat credit on capital goods 199 7.3 Cenvat credit of capital goods obtained on lease, hire purchase or loan 199 7.4 Depreciation cannot be claimed on duty portion of value of capital goods 199 7.5 Removal of inputs and capital goods for job work/repairs/testing 200 7.5-1 Provisions for sending inputs/capital goods for job work/testing/repairs 200 7.6 Procedure for sending goods for Job work under Cenvat 203 7.6-1 Direct despatch of inputs to job worker 204 7.6-2 Scrap/waste generated at end of job worker 205 7.6-3 Amount payable if goods not returned within 180 days 206 7.6-4 Provisions applicable to job worker 207 7.6-5 Direct despatch of final product from place of job worker 207 7.6-6 Job worker can use his own inputs, avail Cenvat of inputs used by him and utilise it elsewhere 208 7.6-7 Job worker can pay duty on value of goods supplied by him 208 7.6-8 Capital goods can be sent to job worker 209 7.6-9 Waste can be sent out for melting/charging and return 209 7.6-10 Removal of rejected inputs for rework and return 210 7.6-11 Consumables and fuel can be sent for job work 210

7.6-12 Job worker can pay duty even if material sent under Cenvat 211 7.7 Removal of inputs other than those covered under Cenvat 211 7.8 Cenvat credit of input service on receipt of invoice 213 Annex 7.1 Clearance of goods from premises of job worker 215 Annex 7.2 Procedure for movement of goods for job work 220 8 RULES 5, 5A AND 5B : REFUND OF CENVAT CREDIT Text of rules 5, 5A and 5B 228 8.1 Refund of Cenvat Credit 231 8.1-1 Is refund claim mandatory or assessee can utilise excess Cenvat Credit for payment of excise duty on DTA sales/service tax on services provided within India? 240 8.2 Provisions as applicable upto 1-4-2012 240 8.3 Exports by units in North-East Region and Sikkim 244 8.4 Refund of Cenvat Credit other than in case of exports 245 Annex 8.1 Procedure for claiming refund on exports 247 Annex 8.2 Cash refund of unutilised credit to exporters who had availed drawback on customs portion of duties 252 Annex 8.3 Procedure for claiming refund of Cenvat credit by units in specified areas 254 Annex 8.4 Clarification regarding problems faced by exporters in availing refund of excess credit 255 9 RULE 6 : OBLIGATION OF A MANUFACTURER OR PRODUCER OF FINAL PRODUCTS AND A PROVIDER OF TAXABLE SERVICE Text of rule 6 259 9.1 No Cenvat credit if final product/service exempt 274 9.1-1 Partial manufacture/provision of exempted products/ services 275 9.1-2 Overriding provisions in respect of Banking, FI and NBFC 276 9.1-3 Options available during 1-4-2008 to 31-3-2011 277 9.2 Provisions in respect of various options 277 9.2-1 Maintain separate inventory and accounts of input goods and input services 277 9.2-2 Maintain separate inventory and accounts of input goods but common records of input services 278 9.2-3 Pay prescribed amount on value of exempted goods or value of exempted services if separate inventory and records not maintained 278

9.2-4 Pay proportionate amount attributable to Cenvat credit utilised for exempted final product/exempted output services 280 9.2-5 Option is to person availing Cenvat credit 281 9.2-6 Rule 6(2) and 6(3) should be taken as complimentary and not mutually exclusive 281 9.3 Exempted goods 282 9.3-1 Goods manufactured under Cenvat provisions or Notification No. 214/86-CE are not exempted goods 284 9.3-2 Exported goods are not exempted goods for rule 6 284 9.3-3 Clearance of waste and scrap 285 9.3-4 Goods cleared without payment of duty under exemption are exempted goods? 288 9.3-5 Exempted goods cannot be cleared under bond and Cenvat credit cannot be availed 289 9.3-6 Supplies to EOU, SEZ, International Competitive Bidding, UN Agencies are not exempt goods for rule 6 290 9.3-7 Molasses used in exempted products 290 9.3-8 Rule 6 of Cenvat Credit rules not applicable if DTA unit supplied goods under Duty Credit Scrip 291 9.4 Meaning of exempted services 292 9.4-1 Services on which service tax paid under some conditional abatement/composition scheme are exempted services 293 9.4-2 Trading is exempt services 293 9.4-3 Service provided to unit or Developer in SEZ is not exempt service for purpose of rule 6 295 9.4-4 Exported service is not exempt service for purpose of rule 6 296 9.4-5 Job work under Cenvat is exempted service for rule 6? 297 9.4-6 Interest on loans or interest on deposits and delayed payment charges are Nil value service 297 9.5 Exceptions from provisions of payment of amount or proportionate reversal 298 9.5-1 Disallowance of Cenvat of capital goods only if used exclusively for exempted final product/services 298 9.5-2 Supply to EOU/SEZ, export of goods, deemed exports or gold manufacture 298 9.5-3 Service provided to unit in SEZ is export and reversal of Cenvat or payment of amount not required 300 9.5-4 Rule 6 not applicable if intermediate product is cleared for subsequent export 301 9.5-5 Some services were eligible upto 31-3-2011 for full Credit, even if partly used for manufacture of exempted goods/output services 301 9.6 Value for purpose of rule 6(3) and 6(3A) 302 9.6.1 Valuation of intermediate product when final product is exempt from duty 304 9.7 Payment of amount on exempted final product/exempt services 305 9.7-1 No Cenvat credit of such amount paid 305 9.7-2 Payment of amount means Cenvat credit not taken 306

9.7-3 When to pay the amount 306 9.7-4 Return of exempted goods for repairs on which amount was paid 306 9.7-5 No Duty payable on intermediate product if final product cleared on payment of amount 307 9.7-6 Amount can be recovered from buyer 307 9.7-7 If assessee recovers amount from buyer, further amount (6% of 6%) is not payable 308 9.7-8 Amount payable even if exemption notification does not state that Cenvat should not be availed 309 9.7-9 Recovery of the amount 309 9.8 Proportionate reversal of Cenvat Credit 309 9.8-1 Inform option to Superintendent 310 9.8-2 Mode of calculations of proportionate reversal 310 9.8-3 Calculation of value of common inputs in case of exempted final products 311 9.8-4 Calculation of amount on provisional basis every month 312 9.8-5 Calculation of final amount after year end 313 9.8-6 Payment of difference if short payment was made 315 9.8-7 Intimation of details to Range Superintendent 315 9.8-8 Self adjustment of excess amount was paid 316 9.8-9 If assessee did not manufacture dutiable goods or did not render taxable in previous year 316 9.8-10 Recovery of the amount 316 9.8-11 Treatment of opening balance of Cenvat credit as on 1-4-2008 317 9.9 Practical illustration 317 9.10 Reversal of credit or payment of amount means Cenvat credit not availed 319 9.10-1 Cenvat credit can be reversed after clearance 322 9.10-2 Reversal sufficient if inputs used in job work/process not amounting to manufacture 323 9.10-3 Payment of amount means Cenvat has not been taken 323 9.10-4 Proportionate reversal sufficient even prior to 31-3-2008 323 9.11 Provisions upto 31-3-2008 326 9.11-1 Options available to manufacturer manufacturing both dutiable and exempt goods 328 9.11-2 Credit of service tax limited if service provider does not maintain separate accounts 328 Annex 9.1 Availment to credit on inputs used exclusively for the manufacture of exempted finished goods 330 Annex 9.2 Reversal of Cenvat credit on clearance of goods under rule 19(2) of Central Excise Rules, 2002 under Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001 332 Annex 9.3 Reversal of MODVAT credit taken on inputs under rule 57CC 333 Annex 9.4 Realisation of amount paid under erstwhile rule 57CC(1) and its retention by manufacturers 334 Annex 9.5 Clarification on amendments to rule 6 effected from 1-4-2008 336

Annex 9.6 Utilization of accumulated Cenvat credit restricted in terms of erstwhile rule 6(3)(c) of Cenvat Credit Rules, 2004 339 Annex 9.7 Non-applicability of rule 6 to developer of a Special Economic Zone 340 Annex 9.8 Availment of accumulated Modvat/Cenvat Credit on molasses for payment of duty on sugar 341 10 RULES 7 & 7A : DISTRIBUTION OF CREDIT BY INPUT SERVICE DISTRIBUTOR Text of rules 7 and 7A 342 10.1 Input Service Distributor 344 10.1-1 Concept of Input Service Distributor is compulsory if assessee has more than one factories or places of provision of service 345 10.1-2 Invoice for distribution of credit by input service 10.1-3 Manner of distribution of Cenvat Credit w.e.f. 1-4-2012 347 10.1-4 Manner of distribution of credit by ISD upto 1-4-2012 349 10.1-5 When assessee has more than one factories 351 10.1-6 Responsibilities of input service distributor 352 10.2 Input Credit Distributor 352 11 distributor 346 RULE 8 : STORAGE OF INPUT OUTSIDE THE FACTORY OF THE MANUFACTURER Text of rule 8 353 11.1 Storage of inputs outside the factory 353 11.2 Procedure to be followed 354 Annex 11.1 Procedure for storing inputs outside the factory premises 355 12 RULE 9 : DOCUMENTS, ACCOUNTS AND RETURNS Text of rule 9 358 12.1 Duty paying documents for Cenvat 363 12.1-1 General provisions in respect of eligible documents 364 12.1-2 Credit if duty paying document is lost 367 12.1-3 Ownership or purchase of inputs is not essential 367 12.1-4 Cenvat Credit in case of defects in duty paying documents 368 12.1-5 Decisions that Cenvat cannot be denied for minor defects in documents 371

12.1-6 Is name of user of goods/receiver of services using inputs/input services necessary on Invoice? 378 12.2 Eligible duty paying documents 381 12.2-1 Invoice of Manufacturer or his depot 381 12.2-2 Supplementary Invoice by supplier-manufacturer or service provider for differential excise duty/service tax 385 12.2-3 Bill of Entry 388 12.2-4 GAR-7 challan when service tax paid by person other than service provider 393 12.2-5 Duty paid on TR-6 or GAR-7 challan in other cases 394 12.2-6 Other documents eligible for Cenvat credit 394 12.3 Debit Note issued by service provider 396 12.4 Responsibility of person taking Cenvat credit 398 12.4-1 Differential Duty refunded to supplier of inputs/ capital goods 399 12.5 Procedure for Cenvat 400 12.5-1 Returns under Cenvat 401 12.6 Records to be maintained for Cenvat 401 Annex 12.1 Problems faced in availing Modvat on rule 52A invoice in the name of the registered office/head office but credit to be availed by the factory 402 Annex 12.2 Problems faced in availing Modvat on bill of entry in the name of registered office/head office but credit to be availed by the factory 403 13 RULE 9 : INVOICES OF DEALERS 13.1 Dealer s Invoice for Cenvat 405 13.1-1 Dealers who can issue Cenvatable Invoice 406 13.2 Procedure of registration of Dealer 408 13.2-1 Requirement of Godown of Dealer 408 13.2-2 Goods must be despatched from premises of dealer 409 13.3 Dealer s invoice for Cenvat 410 13.3-1 Provisions when dealer of imported goods is claiming refund of Special CVD of Customs 412 13.3-2 Dealer can have another series of invoice called Private Invoices for Non-Cenvat goods 412 13.4 Provisions in respect of imported consignments 413 13.4-1 Despatch of split consignments after import 413 13.5 Direct dispatch of goods by manufacturer i.e. transit sale 414 13.6 Other provisions relating to dealers invoice 415 Annex 13.1 Maintenance of records by First Stage and Second Stage dealers and pre-authentication of invoices issued by Second Stage dealers/dealers of imported goods 420 14 RULE 9A : INFORMATION RELATING TO PRINCIPAL INPUTS

Text of rule 9A 421 14.1 Annual Information relating to Principal Inputs 422 14.1-1 Monthly return of receipt and consumption of each of principal inputs 423 14.1-2 Penalty for late submission or non-submission of ER-5/ ER-6, or not submitting electronically 424 Annex 14.1 Form ER-5 425 Annex 14.2 Form ER-6 427 Annex 14.3 Exemption to certain class of manufacturers 429 Annex 14.4 Clarification regarding exemption from filing of ER-4, ER-5 & ER-6 returns 430 15 RULES 10 & 10A : TRANSFER OF CENVAT CREDIT Text of rules 10 and 10A 431 15.1 Transfer/Merger/Shifting of undertaking 433 15.2 Transfer of credit of SAD from one factory to other 438 16 RULE 11 : TRANSITIONAL PROVISION Text of rule 11 439 16.1 Opting or going out of Cenvat 441 16.1-1 Reversal of credit at the time of going out of Cenvat 441 16.1-2 Opting out of Cenvat by SSI 442 17 RULE 12 : SPECIAL PROVISIONS FOR NORTH-EAST REGION, KUTCH DISTRICT OF GUJARAT, STATE OF JAMMU AND KASHMIR AND STATE OF SIKKIM Text of rule 12 443 17.1 Buyer from new units in J&K, Sikkim, NE and Kutch can avail Cenvat credit 444 18 RULE 12A : PROCEDURE AND FACILITIES FOR LARGE TAXPAYER Text of rule 12A 446 18.1 Large Tax Payers Units 450 18.1-1 Procedural relaxations in excise to LTU 452 18.1-2 Sharing of information between CBDT and CBEC 453 Annex 18.1 Procedural facilities to LTP unit 454 Annex 18.2 Conditions and procedures for registration as LTP unit 457

Annex 18.3 Instructions regarding Large Taxpayers Unit 461 Annex 18.4 Instructions regarding sharing of information between CBEC and CBDT 470 19 RULE 12AAA : POWER TO IMPOSE RESTRICTIONS IN CERTAIN TYPES OF CASES Text of rule 12AAA 472 19.1 Withdrawal of facilities to manufacturer/dealer misusing facilities 473 19.1-1 When the facility can be withdrawn and restrictions imposed 474 19.1-2 Which restrictions can be placed and which facilities can be withdrawn? 475 19.1-3 Procedure to be followed 477 19.1-4 Comments on the provisions 478 Annex 19.1 Facilities to be withdrawn and restrictions to be imposed for specified offences 480 Annex 19.2 Authorised Officer 483 Annex 19.3 Measures to provide deterrence for tax evaders in the 20 manufacturing sector 484 RULE 13 : DEEMED CREDIT Text of rule 13 487 20.1 Deemed credit on declared inputs 488 21 RULE 14 : RECOVERY OF CENVAT CREDIT WRONGLY TAKEN OR ERRONEOUSLY REFUNDED Text of rule 14 489 21.1 Scope of the Rule 489 21.2 Earlier controversy upto 1-4-2012 491 21.2-1 Reversal before utilisation means Cenvat credit was not taken 494 21.2-2 Interest is compensatory not penal 495 Annex 21.1 Liability of interest where Cenvat credit was wrongly taken but reversed by assessee before utilization 496 Annex 21.2 Interest liability if cenvat credit wrongly taken 497 22 RULES 15 AND 15A : CONFISCATION AND PENALTY/GENERAL PENALTY

Text of rules 15 and 15A 498 22.1 Penalty for wrong availment of credit 499 22.2 Take or utilise 502 22.3 No penalty if wrong availment of Cenvat due to differences in interpretation 504 22.4 Residual Penalty for violation of Cenvat Credit Rules 504 22.5 Penalty provisions in excise and service tax at a glance 504 23 RULE 16 : SUPPLEMENTARY PROVISION Text of rule 16 507 23.1 Scope of sub-rule (1) 508 23.2 Scope of sub-rule (2) 508 24 JOB WORK 24.1 Job work under Central Excise 509 24.2 Exemption for job work under Cenvat 511 24.2-1 Job worker doing job work under Cenvat may be liable to pay amount after 1-4-2008? 513 24.3 Exemption to Job work under Notification No. 214/86 513 24.3-1 Supplier has to undertake payment of duty on final product 515 24.3-2 Raw material supplier (principal manufacturer) not liable for duty liability of scrap/waste generated at end of job worker 516 24.3-3 Use of goods after job work 517 24.3-4 Who can send the material for job work 518 24.3-5 Sending material when manufacturer does not have manufacturing facility is permissible 518 24.3-6 Penalty for violation of declaration given by raw material supplier 519 24.3-7 Job worker can utilise credit of own material used by him in job work 519 24.4 Exemption for job work for inputs received from SSI unit 520 24.5 Valuation in case of job work 522 24.5-1 Provisions relating to valuation 523 24.5-2 Job worker is responsible for payment of correct duty 524 24.6 Job worker can pay duty even if material sent under Cenvat 525 24.6-1 Job worker can add his own material and avail Cenvat 527 24.6-2 Valuation if job worker pays duty 528 Annex 24.1 Notification No. 214/86-C.E., dated 25-3-1986 530 Annex 24.2 Notification No. 83/94-C.E., dated 11-4-1994 534 Annex 24.3 Notification No. 84/94-C.E., dated 11-4-1994 536

Annex 24.4 Procedure for movement of goods for job work under Notification Nos. 83/94-C.E. and 84/94-C.E., both dated 11-4-1994 538 Annex 24.5 Proforma for undertaking to be furnished for job work 547 25 ACCOUNTING, INVENTORY VALUATION AND CENVAT 25.1 Accounting Treatment of Inputs in Cenvat 548 25.1-1 Accounting Treatment of Inputs received 549 25.1-2 Accounting treatment for Service Tax 550 25.1-3 Write off of non-utilisable balance in Cenvat credit receivable account 551 25.2 Accounting of Duty paid on Capital Goods 552 25.2-1 Accounting in case of lease or hire purchase 25.3 Payment of excise duty demands from Cenvat credit 556 25.4 Payment of amount 556 25.5 Inventory Valuation and Cenvat 557 25.5-1 Conflict between AS-2 and section 145A 557 transactions 555 25.5-2 Accounting treatment of unpaid excise duty on final products 559 25.5-3 Valuation of inventory of WIP and final products 559 25.5-4 Other aspects of valuation 560 APPENDIX Cenvat Credit Rules, 2004 563 Validation provisions pertaining to Cenvat Credit Rules 608 Central Excise Rules, 2002 631 SUBJECT INDEX 665 LIST OF CIRCULARS/TRADE NOTICES 675 LIST OF BASE NOTIFICATIONS 677