5th February, 2001.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Subject: Central Excise – Amendment of Central Excise Rules, 1944 for dispensing with pre-Budget Day and Budget Day restrictions – Other instructions regarding Budget Day –
I am directed to enclose copy of Notification No.2/2001-CE(N.T) dated 2nd February, 2001and to say that Central Excise Rules, 1944 have been amended in order to omit rule 223B, amend rules 2, 100G, 173G(2)(iv) and 224(2) & (2A), The effects of these amendments are as under:
1.1 Rule 2, which provide for definitions, has been amended to insert clauses (1a) and (1b) to define the expressions “appointed day” and “appointed time”. The objective of this amendment is to make the other rules simple to read. By defining “appointed time”, there will not be any need for amending rules in case Government decided to change the time of presenting the Budget. The Ministry of Parliamentary Affairs communicates the appointed day (Budget Day) and appointed time as is determined by the Government. For the presentation of Budget 2001-2002, the appointed day (Budget Day) is 28th February, 2001 and the appointed time is 11.00 A.M.
1.2 Consequent to the new provision of rule 173G(2)(iv), the physical control will be in force only from the “appointed time” till 12.00 (midnight), instead of 6.00 P.M. in the afternoon of the day preceding the Budget Day under the erstwhile rule. In other words self-removal procedure (SRP) would continue to be in operation till the time the presentation of Budget commences in the Parliament (appointed time).
1.3 Rule 223B has been omitted. As a result, there is no requirement of filing any declaration of stock of goods and information regarding last gate-pass/invoice issued at 6.00 P.M. on the day preceding the Budget Day.
1.4 Erstwhile rule 100G(2) has been substituted by New rule 100G (1) and (2). In rule 224, Sub-rules (2) and (2A) have been substituted by new sub-rule (2) and sub-rule (2A).
1.4.1 Under the new rule 100G (1) & (2) and new sub-rule (2) of rule 224, it has been provided that sub-rule (1) of rule 224 (procedures relating to physical control) shall apply in respect of clearances/removal of all excisable goods after the appointed time and also a procedure as specified in these sub-rules, shall be followed in this regard.
1.4.2 It may be noted that the Budget Day restrictions, as contained in sub-rule(1) of rule 100G and sub-rule (2) of rule 224 are imposed only after the appointed time. The implication is that though goods covered by Chapter VII-A will be allowed removals/clearances under self-removal upto the appointed time and the goods not covered by Chapter VII-A (Cigarette) will continue to be governed by the provisions of rule 224(1) upto the appointed time.
1.4.3 There is an important change regarding permissions. The power to give permission for removals/clearances of goods after the appointed time is vested with the Commissioners under new rules this power was vested with the Central Government under the erstwhile provisions of sub-rule (2A) of rule 224. Accordingly, now the Commissioners are not required to send the details of removals/clearances made after the appointed time to the Board for obtaining any post-facto permission of the Central Government.
1.4.4 Amendment in rule 100H is consequential to omission of rule 223B.
2. In accordance with the provisions of Central Excise Rules, 1944, as amended by Notification No.2/2001-CE(N.T.) dated 2nd February, 2001 and considering that the appointed date (Budget Day) is 28th February, 2001 and appointed time is 11.00 A.M. the Board has decided to specify the following procedure for removal/clearances of goods after 11.00 A.M. on the Budget Day: –
2.1 The assessee who intends to remove/clear the goods after 11.00 A.M. on 28.2.2001, should make an application in writing well-in-advance to the Commissioner undertaking that he shall pay duty at enhanced rate, if any, that may be applicable to such goods with effect from 1st March, 2001 and that he shall comply with such conditions as the Commissioner may specify in this regard. Immediate decision should be taken on such requests and permission should be granted in deserving cases and communicated to the assessee in time.
2.2 The assessee, who has been given permission by the Commissioner, will be required to make an application in the Form A.R.1-A in case of a unit in the free trade zone or a hundred percent export oriented undertaking and in Form A.R. 1 in case of all other units, and submit the same to the proper officer, as may be designated by the Commissioner for this purpose. before 5.00 P.M. on 27.02.2001. The proper officer shall acknowledge the receipt of the application(s) immediately.
2.3 A person can also file an application even with regard to those goods that may come into existence at any time after the appointed time (11.00A.M.) and the permission can be granted by the Commissioner subject to such conditions as he may specify. It has been decided that application in relation to goods which are not yet in existence till the appointed time (11.00 A.M. on Budget Day) may be accepted (acknowledged) by the Commissioner in the following situations, namely: –
1. for removal of goods which are utilized within the same factory for further manufacture, or which are cleared to an adjacent factory as an act of continuous process;
2. in respect of factories having round-the-clock dispatches, for example, cement factories and major steel plants; their dispatches being dependent on allotment of railway wagons, carrying capacity of the wagons and the movement of the loaded wagons by the railways;
3. for petroleum products cleared through pipelines and petroleum products required for refueling coastal and foreign going vessels and air crafts;
4. in cases where excisable goods cannot be stored for long or are not capable of being stored;
5. in cases of clearances necessary to maintain essential services; and
6. in respect of removal for exports.
2.4 The Commissioner will make arrangements well in time to designate an officer as ‘proper officer’ in respect of a factory or a group of factories or warehouse or approved store-room so that he is in a position to receive advance applications for clearance after appointed time on the Budget Day which are required to be filed before 5 P.M. on the working day immediately preceding the Budget Day i.e. 27.2.2001. The proper officer will also supervise removals, countersign the invoice and make entries in the Daily Stock Account where an assessee pays duty on fortnightly basis or make entries in PLA/CENVAT Account of the assessee paying duty consignment-wise, on the Budget Day itself.
2.5 With regard to goods which are yet to come into existence as well as goods which are already in existence, it may be difficult for an assessee to accurately foresee the quantity of goods likely to be removed by him after 11.00 A.M. on the Budget Day for purposes of submitting advance applications of removal on the working day preceding the Budget Day. In such cases, the assessee will be permitted to furnish in advance, a provisional application for removal for the approximate quantity of goods likely to be removed after 11.00 A.M. on the Budget Day. However, such assessee should furnish on the day following the Budget Day (1st March, 2001) the final application for removal of the exact quantity of goods removed.
2.6 The power to give such permission should be exercised by the Commissioner himself. In the Commissionerates where no regular Commissioner has been posted and which are under the charge of a Commissioner holding additional charge, the Additional Commissioner/Joint Commissioner may give permission in such bonafide and deserving cases. But relaxations thus granted should be brought to the notice of the Commissioner concerned and his approval should be immediately taken.
2.7 Considering that the power to permit removals/clearances after appointed time is vested with the Commissioners now as explained inPara 1.4.3 of this Circular, it shall be the responsibility of the Commissioners to carefully review the cases in which permissions were granted to ascertain whether there was any enhancement in the rate of duty, and if so, the whether the differential duty was properly accounted for in the Daily Stock Account by as assessee availing fortnightly payment facility. In case an assessee is paying duty consignment-wise, the Commissioner shall ensure that the differential duty, if any, is recovered.
3. Appropriate measures should be taken to ensure that the procedures specified in para 2 above are strictly followed in respect of removals/clearances effected after the appointed time (11.00 A.M.) and action is taken in case of any contravention.
4. Special efforts should be made to inform the public about the availability of Self Removal facility till 11.00 A.M. on the Budget Day in respect of goods covered by Chapter VII-A and the instructions contained in this Circular. The field officers should also be properly briefed so that the new procedure works smoothly.
5. Receipt of this Circular may please be acknowledged.
6. Hindi version will follow.
Under Secretary (CX.6)