Analysis of Union Budget 2017 provisions of Income Tax Service Tax Excise Duty Custom Duty with Budget Highlights Commentary Speech, Notification, News & Articles.
1.1 For the administration of the Central Excise Act, 1944 and the Central Excise Rules, 2002 (hereinafter referred to as the ‘said Rules’) manufacturers’ of excisable goods or any person who deals with excisable goods with some exceptions, are required to get the premises registered with the Central Excise Department before commencing business.
2. Legal Provisions:
2.1 As per SECTION 6 of the Central Excise Act, 1944- any prescribed person who is engaged in –
(a) The production or manufacture or any process of production or manufacture of any specified goods included in the (the First Schedule and the Second Schedule) to the Central Excise Tariff Act, 1985(5 of 1986) or
(b) The wholesale purchase or sale (whether on his own account or as a broker or commission agent) or the storage of any specified goods included in (the First Schedule and the Second Schedule) to the Central Excise Tariff Act, 1985 (5 of 1986), shall get himself registered with the proper officer in such manner as may be prescribed.
2.2. For all practical purposes, the legal provisions contained in rule 9 of the Central Excise Rules, 2002 govern the scheme of registration. This rule is reproduced below:
Registration – (1) Every person, who produces, manufactures, carries on trade, holds private store-room or warehouse or otherwise uses excisable goods, shall get registered;
Provided that a registration obtained under rule 174 of the Central Excise Rules, 1944 or rule 9 of the Central Excise (No.2) Rules, 2001 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules.
(2) The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration.
(3)The registration under sub-rule (1) shall be subject to such conditions, safeguards and procedure as may be specified by notification by the Board.
3 . Persons Requiring Registration:
3.1 In accordance with Rule 9 of the said Rules the following category of persons are required to register with jurisdictional Central Excise Officer in the Divisional Office having jurisdiction over his place of business/factory:
3.2 Separate registration is required in respect of separate premises except in cases where two or more premises are actually part of the same factory (where processes are interlinked), but are segregated by public road, canal or railway-line. The fact that the two premises are part of the same factory will be decided by the Commissioner of Central Excise based on factors, such as:
3.3 Separate Registration is required for each depot, godown etc. However, in the case of liquid and gaseous products, availability of godown before grant of registration should not be insisted upon.
3.4 Registration Certificate may be granted to minors provided they have legal guardians, i.e. natural guardians or guardians appointed by the Court, as the case may be, to conduct business on their behalf.
4. Exemption from Registration:
4.1 The Central Board of Excise and Customs (CBEC), by Notification No.36/2001-CE (NT) dated 26.6.2001 as amended has exempted specified categories of persons /premises from obtaining registration. The exemption applies to the following:
i) Person who manufacture the excisable goods, which are chargeable to nil rate of excise duty or are fully exempt from duty by a notification.
ii) SSI manufacturers having annual turn over below the specified exemption limit. However, such units will be required to give a declaration (Annexure-1) once the value of their clearances reaches the specified limit which is Rs. 40 Lakhs presently.
iii) In respect of ready-made garments, the job-worker need not get registered if the principal manufacturer undertakes to discharge the duty liability.
iv) Persons manufacturing excisable goods by following the warehousing procedure under the Customs Act, 1962 subject to the following conditions: –
(a) The said excisable goods and any intermediary or by-products including the waste and refuse arising during the process of manufacture of the said goods under the Customs Bond are either destroyed or exported out of the country to the satisfaction of the Assistant Commissioner of Customs or the Deputy Commissioner of Customs, in-charge of the Customs Bonded Warehouse;
(b) The manufacturer shall file a declaration in the specified form annexed in triplicate for claiming exemption under this notification;
(c) no drawback or rebate of duty of excise paid on the raw materials or components used in the manufacture of the said goods, shall be admissible.
v) The person who carries on wholesale trade or deals in excisable goods (except first and second stage dealer, as defined in Cenvat Credit Rules, 2002 and the depots of a registered manufacturer);
vi) A Hundred per cent Export Oriented Undertaking, licensed or appointed, as the case may be, under the provisions of the Customs Act, 1962 other than having dealings with DTA.
vii) Persons who use excisable goods for any purpose other than for processing or manufacture of goods availing benefit of concessional duty exemption notification.
4.2 The Drugs and Cosmetics Rule, 1945 recognises the concept of loan licence in the manufacture of P or P medicines. As a result, the system of accepting the said concept is still prevalent under excise law. In such cases the procedure prescribed under Notification No.36/2001-CE(NT) dated 26/6/2001 has to be followed. The principal manufacturer who has`undertaken to comply with the procedural formalities will have to maintain separate accounts in respect of goods manufactured on his own account and goods manufactured on behalf of the loan licensee. However, the principal manufacturer has to aggregate the clearances made by him together with clearances made on behalf of the loan licensees with regard to eligibility as well as exemption limit. In other words, the clearances made on behalf of the loan licensee have to be clubbed with that of the principal manufacturer (by the manufacturer from one or more factories and from the factory by one or more manufacturers).
5.1 Important changes in the Registration procedure
i) The new Registration process has been implemented in respect of all new registrants with effect from 1.10 2002
ii) Application for Registration should be submitted to the jurisdictional Divisional Office and Registration shall be done at Divisions it ,read of Ranges.
iii) Registration Certificate shall be issued under the signature of the Divisional Officer, i.e. Deputy/Assistant Commissioner.
iv) Registration Process would be carried out on computer through system called System for Allotment of Central Excise Registration (SACER) by feeding the d493/59/99-CX.6 into Central Server accessing http.//sermon.nic.in/sacer.html which shall automatically generate 15-digit PAN based Registration Number or a Temporary Registration Number in case registrant does not have PAN.
v) Registration of EOUs which have inter-linkage with domestic economy through procurement and/or sale of goods will be done on identical pattern as in case of other Central Excise assesses with few changes. This has been introduced with effect from 1.10.2002 vide Notification No.31/2002-C.E. (N.T.), dated 17.9.2002, which amends Notification No.36/2001-C.E. (N.T.) dated 26.6.2001. Other EOUs which have no inter-linkage with the domestic tariff area shall continue to be treated as deemed registered and need not obtain the 15 digit PAN-based Registration Number.
vi) In the Port Towns, the EOU units located therein are administratively under the charge of the officers of Customs vide Board’s Circular No.72/2000-Cus. dated 31.8.2000. Accordingly, for the purpose of Registration process and for handling the matters relating to the provisions of Central Excise law including the filing of Returns prescribed there under, the officers of Customs have been designated as officers of Central Excise vide Notification No.32/2002-C.E.(N.T.), dated 17.9.2002 .
vii) It has been envisaged that all new registrants not having PAN (including small-scale Bid and Match Units) will be allotted a system generated 15 digit Temporary Registration Number with effect from 1.10.2002. This would eventually get converted to a regular 15 digit PAN Based Registration Number.
5.2 Important changes in Format of Application for Registration
(i) The Format of Application for Registration has been revised vide Notification No. 30/2002 C.E.(N.T.), dated 17.9.2002 which amends Notification No.35/2001-C.E. (N.T.), dated 26.6.2001, and has become applicable from 1.10.2002. With effect from 1.10.2002, the new Form provides for both obtaining Registration as well as for carrying out amendments, if any, in the information supplied after completion of Registration. For this purpose, option boxes are provided for new Registration or amendments, In case the Application Form is used to carry out amendments to the information given earlier, the registrant must furnish his Registration Number so that the system can recall the earlier Application Form to carry out the desired amendment(s).
(ii) An assessee may have different legal names i.e. one appearing in PAN and other under the name and style in which he carries on his business from the registered premises. Therefore an additional field- for providing ‘the-name as appearing in PANis proMed the Application Form.
(iii) New fields have been provided for information regarding constitution of assessee, property holding rights (like ownership, lease etc.), estimated investment in land, plant and machinery, assessee’s banks account numbers and identifier numbers issued by other Government agencies (Customs, DGFT, Sales Tax etc.).
(iv) Fields like ‘Name of the Registrant’, addresses, telephone number, fax number, boundaries of premises to be registered, major excisable goods to be manufactured etc. have been modified keeping in mind the requirements of Computer system.
(v) In cases of Proprietorship concerns or those having no authorized persons the details of the Registrant have been added to the relevant field.
(vi) The name of the Registrant/authorized Person figures in the Declaration annexed to the Application Form. In case of any change, it would be necessary to obtain another Declaration reflecting the change and effective date.
(vii) Changes have been made in the format for Grant of acknowledgement of the Application, which is to be given in the event, the Registration Certificate is not delivered on the spot at the time of the receipt of the Application Form.
(viii) Separate Document Locator Code has been Dispensed with since the new Registration process envisages on the spot grant of Registration Number which will operate as the reference number.
5.3 Components of 15 digit based Registration Number
(i) The PAN based Registration Number is Alphanumeric. The first part is the 10-Character (alphanumeric) Permanent Account Number (PAN) issued by Income Tax authorities to the person (includes a legal person) to whom the Registration No. is allotted.
(ii) The second part comprises of a fixed 2-Character alpha-code indicating the category of the Registrant, which will be as follows:
(1) Central Excise manufacturers: XM (Including registered warehouses).
(2) Registered Dealers: XD
(iii) The third part is a 3-Character numericcode-001, 002, 003…etc. In case, a manufacturer registered with the Central Excise Department, has only one factory/ dealers’s premise/warehouse, the last 3 characters will be “001”. If there are more than one factories/warehouses/dealer’s premises of such a person having common PAN for all such factories / warehouses /Dealer’s premises, the last 3 character of the Registration Number would be “001, 002, 003…etc.
Examples of 15 digits PAN based Registration Number:
(a) Where the registrant has only one factory: New Registration Number will be –
Suppose PAN is ABCDE1234H, the New Registration Number will be
(b) Where the registrant has more than one factory, say 3 factories, having PAN as aforesaid, then the New Registration Number will be:
( c ) Where the registrant has one factory and is also registered as dealer, having PAN as aforesaid, then the New Registration Number will be:
ABCDE1234HXM 001 (for Manufacturer) ABCDE1234HXD 001 (for Dealer)
(iv) Where the Registrant is not having PAN (including small Scale Beedi/Match manufacturers) the system will itself generate a Temporary 15 digit PAN based Registration Number: Similar Temporary Number will be generated automatically (from 1.10.2002) for the assesses who may be having PAN but who have so far not applied for or obtained 15 digit PAN Based Registration Number. An example of the Temporary Number is:
TEMP)000(XXXM001 (for Manufacturer) TEMP)000000(D001 (for Dealer)
5.4 Procedure for application for Central Excise Registration and grant of Registration Certificate
(i) With effect form 1.10.2002 every person requiring Registration with the Central Excise (except EOUs located in Port Towns) shall apply in the proper Form, complete in all respects, in duplicate along with a self-attested copy of PAN (letter/card issued by the Income Tax Department), to the Jurisdictional Deputy/ Assistant Commissioner of Central Excise. The instructions relating to filling up of Application for Registration may be gone through carefully before filling up the Form. The Divisional/Range officers shall provide necessary support to the assessee, as may be required for completing the Form.
(ii) On receipt of Application the nominated officer (Inspector) shall scrutinize the same and if found in order, it shall be fed in the Divisional Office into the SACER by accessing the website http;//sermon.nic.in/sacer.html. In this regard, the . Directorate of Systems has circulated a manual on SACER, a soft copy of which is also available on the site itself, which will detail the fields and explain how these are to be completed.
(iii) In case the Application is not found in order or is incomplete, the nominated Officer will advise the Registrant of the deficiencies and ensure its completion before it is sent for being entered into SACER. Suitable entry will be made of the action taken in the record to be maintained for the purpose.
(iv) On completion of the data entry, the system would Automatically generate a Registration Certificate bearing the 15 digit Registration Number, which will be delivered to the assessee on the spot. As seen, normal time taken to complete the data entry of a application for Registration is 30 minutes and it would be possible to hand over the Registration Certificate immediately upon completion of the data entry.
(v) In the event the Registrant is not in possession of the PAN and has applied for the same, he shall be required to furnish a copy of the said Application. This would be used by the Divisional/Range Office to pursue the grant of PAN and subsequent conversion of the Temporary Registration Number into a 15 digit PAN based Registration Number.
(vi) In the event, it is not possible to hand over the Registration Certificate immediately at the time of receipt of the Application for any reason such as either Registrant or Deputy/Assistant Commissioner is not available or there is a technical difficulty, then the acknowledgement of the Application will be given to the assessee on the spot. Later, the Registration Certificate shall either be sent to the assessee by Registered Post or handed over personally to him next working day, as per his choice to be indicated upon the Application Form.
(vii) After grant of Registration Certificate, the disposal of the copies of the Application Form shall be, as follows:
(a) Original copy will be retained by the Divisional Office for record along with the copy of Registration Certificate issued.
(b) Duplicate copy along with a copy of Registration Certificate will be sent to the concerned Range Office for post facto verification.
(viii) The Registration Number can be used for removals, duty payments and other requirements of the Central Excise Act, 1944 and rules made there under.
(ix) Once Registration is granted, it has a permanent status, unless it is suspended or revoked by the appropriate authority in accordance with law or is surrendered by Registrant.
5.5 New Central Excise Registration Procedure for Powerloom weavers/Hand Processors/Dealers of Yarns and Fabrics/Manufacturers of Ready Made Garments.
A simpler application Form was introduced exclusively for Registration of Power loom Weavers/Hand Processors/Dealers of Yarns and Fabrics/Manufacturers of Ready Made Garments who were required to pay duty or follow Central Excise procedures on account of changes in the Finance Act, 2003-04. The new Form was notified vide notification No.38/2003-CE (NT) dated 22nd April, 2003 (Annexure-2). In comparison to the existing Registration application Form, this format seeks information only about the registrant. The Registration Form-IA, shall be used for the new registrants in the textile and textile articles sector only. It is also prescribed that the Registration Form may be handed over by the trade and industry Associations in the Commissionerate headquarters where these may be processed by a special cell. Finally, the verification of the premises was not required to be conducted at this juncture for grant of Registration.
Vide Circular No. 760/7612003-CX dated 3.11.2003, new Central Excise Registration procedure for manufactures of hand rolled cheroot of tobacco under sub-Heading No.2402.00 of Central Excise Tariff Act , 1985 has been provided. The applications for Registration of the members can be collected by the Associations and handed over at the Divisional headquarters where the Registration would be issued. As a measure of trade facilitation, a simpler application form exclusively for hand rolled cheroot of tobacco manufacturers has been notified vide notification No. 81/2003-Central Excise (N.T.) dated 3rd November 2003. In comparison to the existing Registration application Form, this format seeks information of paramount importance only from the registrant. The Registration Form-1 B, as notified now, shall be used for the new registrants in the manufacture of hand rolled cheroots of tobacco only.
In these categories, those who are already registered need not apply afresh. Further, the normal procedure of grant of PAN based Registration is not to be strictly adhered to while granting Registration to the new registrants in manufacture of hand rolled cheroots of tobacco and in textile sector as detailed above. In other words, Registration should be given in the absence of PAN, if not available.
5.6 Procedure for application for Central Excise Registration and allotment of Registration Number for EOUs and EPZ units
(i) EOU and EPZ units which have inter-linkage with Domestic tariff area through procurement and/or sale of goods are required to obtain Registration with effect from 1.10.2002. Other EOUs and EPZ units would continue to be treated as deemed registered with the Central Excise authorities.
(ii) EOUs within the Municipal Limits of port-cities/town are Administratively under the officers of Customs who have been designated as Officers of Central Excise for purpose of legal requirements under Central Excise provisions. Accordingly, the EOUs in port-cities/towns shall file their Application Form for Central Excise Registration with the concerned Deputy/Assistant Commissioner of Customs. it is the responsibility of the Deputy/Assistant Commissioners to have the data entered into SACER and to issue the Registration Certificate by following the procedure described supra.
(iii) EOUs located in other than port towns/cities are administratively under the Central Excise Cornmissionerates. Hence, it shall be the responsibility of the jurisdictional Divisional Officer to grant the Registration to such units. For this purpose the same process would be followed, as indicated in paragraph 5.4 above.
(i) There shall be a post-registration verification of the premises for which Registration is sought, by the Range Officer within 5 working days of the receipt of Duplicate Copy of Application for Registration along with a copy of Registration Certificate. The Range Officer along with the Sector Officer shall verify the declared address and premises. If found in order, he will certify the correctness thereof on the Duplicate copy of the Application for Registration and -append his dated signature thereon. A Copy thereof will be sent to the Divisional Office for Record. The name of the officer doing the verification and the date of verification shall also be entered into the system.
(ii) If any deviations or variations are noticed during the Verification, the same should be got corrected. Any major discrepancy, such as fake address, non –existence of any Factory etc. .shall be reported in writing to the Divisional Officer within 3 working days and action shall be initiated by the Divisional Officer to revoke the Registration after providing reasonable opportunity to the Registrant to explain his case.
(iii) EOUs are also granted a customs private bonded warehouse licence. Accordingly, the concerned Officer must at the stage of grant of this licence also carry out the verification required from the point of view of Central Excise Registration, if required, so as to avoid repeat visit to the unit. Hence, it is envisaged that in case of EOUs, there would be no necessity of post facto verification.
(iv) If the EOU is exempt from obtaining the Customs private Bonded warehouse licence but requires Central Excise Registration then post verification may be done as envisaged in (i) above.
(i) Divisional Office or the Office of the Deputy/Assistant Commissioner of Customs, as the case may be, shall maintain a suitable record of the action taken on receipt of Application for Registration which is incomplete or not in order.
(ii) Divisional Office will maintain a record of Verification Reports received from the Range Office along with the Original copy of the Application Form. Office of Deputy/Assistant Commissioner of Customs will maintain similar record.
(iii) Range Office will maintain suitable record of Registration granted including details of the Application Form and the Registration Certificate.
(iv) Records at Divisional Office/Office of Deputy/Assistant Commissioner of Customs and Range Office shall specifically include details of verification of premises and name and designation of Officers who verified it with his remarks thereon.
(v) The Divisional Office/Office of Deputy/Assistant Commissioner of Customs and Range Office should have readily available record of Temporary Registration Numbers with details of steps taken to convert them to 15 digit PAN based Registration Numbers.
(vi) The Divisional office/Office of Deputy/Assistant Commissioner of Customs and Range Office should have readily available complete list of all Registered units under their charge.
5.10 Procedure for existing Registrants
(i) The existing Registrants shall be required to furnish the Details as per the new Format of Application to their jurisdictional Deputy/Assistant Commissioners within 3 months from 1.10.2002. It shall be the responsibility of the concerned Deputy/Assistant Commissioners to ensure that the data available at SACER pertaining to all Registrants in their respective jurisdiction is complete.
(ii) All existing EOUs which are so far treated as Deemed Registered but are required to obtain Registration with effect from 1.10.2002 shall furnish the details as per the New Format of Application to their jurisdictional Deputy/ Assistant Commissioners/Development Commissioner for inclusion in the SACER data base,
5,11 Procedure for Amendment of the information
(i) The new Form of Application shall be used for carrying out Amendments to the information provided earlier by the assessee for obtaining Registration. Suitable entries will be made in the database upon receipt of such amended information.
(ii) Change in information in respect of the name and address of the Registrant would require a change in the details entered on the Registration Certificate itself. Hence, in such situation a fresh Registration Certificate bearing the earlier allotted 15 digit PAN based Registration Number will be issued to the assessee after surrender of the earlier issued Registration Certificate. The procedure followed would be the same as in place for issue of fresh Registration Certificate except that no verification is necessary in case there is no change in address or premise.
6. Conditions, safeguards and procedures for registration:
The Central Board of Excise & Customs has specified certain conditions, safeguards and procedures for registration of a person by Notification under Central Excise Rule 9 in specified cases:
(1) Application for registration: Every person specified under sub-rule (1) of Rule 9, unless exempted from doing so by the Board under sub-rule (2) of rule 9, shall get himself registered with the [jurisdictional Deputy or Assistant Commissioner of Central Excise] by applying in the form specified in [Annexure-3and Annexure- 2];
(2) Registration of different premises of the same registered person : If the person has more than one premises requiring registration, separate registration certificate shall be obtained for each of such premises.
[Provided that if such person manufacturers or carries on trade in goods falling under Chapter 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62 or 63 of the First Schedule to the Central Excise Tariff Act, 1985 (1 of 1986), and has more than one premises requiring registration; he may obtain a single registration for all such premises, which fall within the jurisdiction of one Commissioner of Central Excise subject to condition that the such person, while making application in terms of clause (1) of this notification, declares the details of all such premises in the form specified in Annexure 3].
(3) Registration Certificate and Number: Registration Certificate in the form specified in Annexure-4 containing registration number shall be granted within seven days of the receipt of the duly complete application.
(4) Transfer of Business : Where a registered person transfers his business to another person, the transferee shall get himself registered afresh.
(5) Change in the constitution : Where a registered person is a firm or a company or association of persons, any change in the constitution of firm, company or association, shall be intimated to the jurisdictional Central Excise Officer within thirty days of such change.
(6) De-registration : Every registered person, who ceases to carry on the operation for which he is registered, shall de-register himself by making a declaration in the form specified in Annexure-Ill and depositing his registration certificate with the Superintendent of Central Excise.
(7) Revocation or suspension of registration: A registration certificate granted under this rule may be revoked or suspended by the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, if the holder of such certificate or any person in his employment, is found to have committed breach of any of the provisions of the Act or the rules made there under or has been convicted of an offence under Section 161, read with Section 109 or with Section 11,6 of the Indian Penal Code (45 of 1860).
[Authority – Notification No.35/2001-C.E.(N.T.), dated 26.6.2001as amended by Notification No.65/2001-C.E.(N.T.), dated 17.10.2001; No. 30/2002-C.E.(N.T.), dated 17.9.2002; No. 29/2003-
C.E.(N.T.); dated 1.4.2003 and No. 38/2003-C.E. (N.T.), dated 22.4.2003.]