Circular No. 62/62/94-CX
Dated 26/9/94


Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Excise and Customs, New Delhi

Subject : Instructions to field formations on the changes brought about in Central Excise procedure – Regarding

A number of changes have been made in Cenral Excise Procedures since the presentation of the Budget 1994-95. They include : 
(i)    Assessment on invoice value; 
(ii)   Extension of the Modvat Scheme to invoices issued by dealers; and 
(iii)   Modvat on capital goods obtained on hire-purchase or lease.

2. As regards assessment based on invoice a Circular has already been issued from F.No.212/3/94-CX-6 (No.45/45/94-CX-6 dated 4.7.94) requestiong to furnish evaluation reports on assessment of RT-12 Returns for the month of April-May 1994 alongwith suggestions.  Except from few Collectors, no such report has been received.

3. As regards (iii) above, the issue of difficulties faced in the implementation of the aforesaid procedures was also highlighted in Customs and Central Excise Advisory Council”s meeting held on 14.9.1994 wherein it was informed by trae associations that wherever he objections are taken against the assessee”s claims of Modvat on capital goods the same should be discussed  with the jurisdictional Collector of Central Excise. This suggestion has been accepted by the Board.

4. since the amount involved in the Modvat on capital goods may be substantial and at the same time no undue harrasement is to be caused to manufacturers, Board has decided that instructions may be issued to field formations to the effect that assessment of RT-12 Returns should be done expeditiously and that to only after verificaiton of the duty paying documents on the capital goods, the Modvat credit accumulated, the goods produced during the month by use of capital goods, the duty calculated on the latter and the set off of this duty against the accumulated modvat credit.

5. An evaluation report alongwith views and suggestions, if any, and the statistical data of modvat credit  taken on capital goods and misuse detected, if any, should be furnished to the Board within a fortnight of receipt of this Circular and thereafter on monthly basis.

(I.P. Lal)
Deputy Secretary to the Government of India

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