Education Cess and Secondary & Higher Education Cess leviable on excisable goods fully exempted. Further, standard ad valorem rate of excise duty increased from 12% to 12.5%.
Amendments in the Central Excise Act, 1944
Section 11A proposed to be amended to provide as follows: (i) category of cases where extended period of time applies but the transactions are recorded in the specified record, to be removed from the statute, (ii) provision relating to relevant date also amended to provide definition of relevant date in respect of cases where a return is not filed on the due date and where only interest is required to be recovered, (iii) it is proposed that provisions of section 11A not to apply to cases where the nonpayment or short payment of duty is reflected in the periodic returns filed and that in such cases recovery of duty shall be made in such manner as may be prescribed in the rules.
Section 11AC proposed to be substituted so as to rationalize the penalty in the following manner:
(i) in cases not involving fraud or collusion or wilful mis-statement or suppression of facts or contravention of any provision of the Central Excise Act or rules with the intent to evade payment of excise duty
a) in addition to the duty as determined under section 11A(10), a penalty not exceeding 10% of the duty so determined or `5000, whichever is higher, shall be payable;
b) if duty and interest payable thereon under section 11AA is paid either before issue of show cause notice or within 30 days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of said duty and interest shall be deemed to be concluded;
c) if duty as determined under section 11A(10) and interest payable thereon under section 11AA is paid within 30 days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty shall be equal to 25% of the penalty so imposed, provided that such reduced penalty is also paid within 30 days of the date of communication of such order.
(ii) in cases involving fraud or collusion or wilful mis-statement of suppression of facts or contravention of any provision of the Central Excise Act or rules with the intent to evade payment of excise duty
a) in addition to the duty as determined under section 11A(10), a penalty equal to the duty so determined shall be payable.
b) if duty and interest payable thereon under section 11AA is paid within 30 days of communication of show cause notice, the amount of penalty payable shall be 15% of the duty demanded, provided that such reduced penalty is also paid within 30 days of communication of show causenotice and all proceedings in respect of said duty, interest and penalty shall be deemed to be concluded;
c) if duty as determined under section 11A(10) and interest payable thereon under section 11AA is paid within 30 days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty shall be equal to 25% of the duty so determined, provided that such reduced penalty is also paid within 30 days of the date of communication of such order; and
(iii) If the duty amount gets modified in any appellate proceeding, then the penalty amount mentioned in (ii) (a) above and interest shall also stand modified accordingly. Where the duty amount is increased in the appellate proceedings, the benefit of reduced penalty as specified shall be admissible if duty, interest and reduced penalty in relation to such increased amount is paid within 30 days of such appellate order.
Section 32B proposed to be amended so as to enable Vice Chairman or Member of the Settlement Commission to officiate as Chairman, in the absence of Chairman of the Settlement Commission.
Penalty provided under sub-sections (4) and (5) of section 37 proposed to be enhanced from `2000 to `5000. An explanation proposed to be inserted to section 3A(3) to provide that “factor” relevant to production, in the said sub-section, includes “factors” relevant to production. This enables the Central Government to specify more than one factor relevant to the production of such goods. This amendment will come into effect immediately.
Amendments in the CENVAT Credit Rules, 2004
1. Time limit for taking CENVAT credit on inputs and input services enhanced from the present 6 months to one year [Rule 4]. 2. Time limit for return of capital goods from a job worker enhanced from the present 6 months to two years [Rule 4]. 3. Provision relating to reversal for CENVAT credit, presently applicable to exempted goods and services, made applicable to non-excisable goods also [Rule 6] 4. CENVAT credit taken, but NOT utilized, also to be recovered [Rule 14].
Amendments in the Central Excise Rules, 2002
Digitally signed invoices may be issued and records may be preserved in electronic form by a manufacturer [Rules 10 and 11].
Simultaneous amendments in Central Excise Rules, 2002 and CENVAT Credit Rules, 2004
Direct dispatch of goods to registered dealer’s/ registered importer’s customers without first bringing them to the dealer’s / importer’s registered premises subject to the conditions specified therein.
Direct dispatch of inputs and capital goods to job worker without first bringing them to the manufacturer’s /output service provider’s premises subject to the conditions specified therein. 3. Application of certain provisions of these rules, presently applicable to the registered dealers, to apply to the registered importers also.
Other amendment
Registration process simplified to ensure that registration is granted within 2 working days of the receipt of a duly completed application form. Verification of documents and premises, as the case may be, shall be carried out after the grant of the registration.