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Introduction
Central Excise duty is an indirect tax levied on goods manufactured in India. Excisable goods have been defined as those, which have been specified in the Central Excise Tariff Act as being subjected to the duty of excise. The word "Goods" has not been defined in the Act. Therefore its meaning is borrowed from the constitution and from the sale of goods Act and understood as per the decisions of the apex court. Under excise it is understood to be items that are movable, i.e. capable of being moved and marketable, i.e. capable of being sold.
 
Central Excise Act defines 'Manufacture' by an inclusive definition as any process incidental or ancillary to the completion of a manufactured product. Manufacture under Central Excise can be understood as process wherein the name, characteristic and use of the input are changed or is/becomes distinct and different after the process. Thus a process which simply changes the form or size of the same article or enhances the value of the article would not constitute manufacture. Repairing or reconditioning does not constitute manufacture. Assembling would constitute manufacture.
Registration and ECC Code
Persons requiring Central Excise registration.
 
Every manufacturer of excisable goods other than the ones specifically exempted, is required to get himself registered under the Central Excise law. A manufacturer is exempt from the requirement of getting himself registered so long as the goods manufactured by him attract Nil rate of duty or remain exempt from the whole of the duty of excise leviable thereon. Every person who intends to issue invoices under Rule 57G or Rule 57T or who intends to procure excisable goods under bond for special industrial purposes in terms of provisions of Chapter X, is required to get himself registered under the Central Excise law.
 
Procedure of obtaining registration.
 
The application for registration is to be filed with the Superintendent of Central Excise having jurisdiction over the premises in respect whereof the registration is to be obtained. The following documents are to be submitted for obtaining the registration
  1. Possession letter/allotment letter/rent deed of the premises to be registered;
  2. Article of Association of the company or Partnership deed of the firm, as the case may be;
  3. List of items with their Tariff sub-headings proposed to be manufactured; list of items with their Tariff sub-headings, if any, obtained, under Chapter X procedure or dealt within;
  4. Registration certificate issued under Shop and Establishment Act and PAN Number;
  5. Duly filled in application in the form R-I in triplicate;
  6. Grounds plan of the premises in duplicate including details of plant & machinery etc.;
  7. Details of the proprietors/all partners/Directors of the company including
    1. Name(s),
    2. Address - Official/ residential.
The application for registration in form R-I is either to be signed before the Superintendent of Central Excise or can be submitted duly attested and notarised by the notary public.
 
Grant of registration.
 
After receipt of application for registration, the jurisdictional Superintendent is to grant registration within 30 days of the receipt of the application. Even if the registration is not granted, it will be deemed to have been granted. The registration is in respect of premises and not a person.
 
Stage of filing application for registration.
 
For the goods that attract Central Excise duty right from the beginning, the registration is to be applied for before the removal of the goods. These goods are not covered under Small-Scale Exemption notification. Even where a manufacture of goods eligible for Small-Scale exemption opts for availment of Modvat credit, the registration is to be applied for before the removal of the goods.
Manufacturers of Cosmetics and Refrigeration goods are to apply for registration after crossing the clearances of Rs. 30 lakhs.
Manufacturers of other goods are to apply for registration when the clearances exceed Rs. 50 lakhs.
 
Validity of registration certificate.
 
A registration certificate is valid till the relevant unit is engaged in manufacturing of excisable goods. The registration certificate is not required to be renewed.
 
Transferability of registration certificate.
Registration certificate is not transferable. When a registered person transfers his business to another person, the transferee has to obtain a fresh registration.
 
Requirement of amendment in registration certificate.
 
When a registered firm or a company or association of persons undergoes a change in Constitution, the jurisdictional Range Officer is to be intimated within 30 days of such a change for incorporation of this fact in the registration certificate.
In case a registered person desires to manufacture a new product, he is to get the product endorsed on his registration certificate.
 
Requirement of exhibition of registration certificate.
 
Every registered person is required to exhibit the registration certificate or a certified copy thereof in a conspicuous part of the registered premises.
 
Whether 100% export oriented unit or unit in free trade zone is required to be registered.
 
A 100% Export Oriented Unit or a unit in Free Trade Zone licenced or appointed under the provisions of Customs Act, 1962, is deemed to be registered under the Central Excise law.
 
Surrender of registration certificate
 
When the registered person ceases to carry out the operation for which he is registered, he is required to surrender his registration certificate immediately to the Range Officer.
 
How to obtain duplicate registration certificate
 
In case the original registration certificate is lost or destroyed, the assessee can apply for a duplicate registration certificate to the jurisdictional Range Superintendent after depositing a fee of Rs.30/- through a TR-6 challan in any nominated branch of Punjab National Bank.
 
Requirement of filing declaration for the manufacturers exempt from registration.
 
Where the goods are chargeable to nil rate of duty or where the exemption from whole of the duty of excise leviable thereon is granted on the basis of:
  1. value of goods; or
  2. process of manufacture of goods; or
  3. quantity of clearances of goods made in a financial year; or
  4. payment of appropriate duty of excise in respect of the raw material used in the manufacture of the goods; or
  5. conditions, if any, specified in the schedule to the Central Excise Tariff Act, 1985 in respect of such goods; orConditions, if any, specified in any exemption notification,
the manufacturer will have to file a declaration in the prescribed proforma with the jurisdictional Assistant Commissioner before 15th of April every year.
 
In case of exemption based on value of clearances in a financial year, only those assesees whose value of clearances in previous financial year or in current financial year has exceeded Rs. 40 lakhs, or is likely to exceed Rs. 40 lakhs, are required to file a declaration before 15th April with jurisdictional Assistant Commissioner.
 
ECC code number and its utility.
 
ECC code is known as Electronic Computer Code and is allotted to all registrants of Central Excise. This code comprises of 10 digits. The first 2 digits represent the Commissionerate, next 2 digits represent the division, next 2 digits represent the range, the 7th digit indicates the sector, 8th & 9th digit represent the unit within the sector and the last digit is a check digit. The ECC code number facilitates proper account of Assessee's records. This code number is a mandatory requirement and is given to the registrant by the Pay and Accounts officer. But the application in this regard is to be submitted to the jurisdictional Range Officer. ECC code number is required to be mentioned on all the statutory documents issued and maintained by the registrant.
Collection of Duty of Excise
With effect from 1st day of April, 2000 every manufacturer shall discharge his duty liability in respect of clearances made during the first fortnight of the month, by the 16th day of that month, and in respect of clearances made during the second fortnight of the month, by the last working day of that month:
Provided that a manufacturer availing the exemption under a Notification based on value of clearances in a Financial Year may discharge his duty liability in respect of clearances made during a calendar month, by 15th day of succeeding month.
 
How to pay duty.
 
The assessee can pay duty from two accounts. One account is called current account also described as PLA. The other account is called the Modvat account.
 
Current account or PLA (Personal ledger account)
 
After registration of a new factory, the assessee should deposit a token amount on TR-6 challan in any of the nominated branches of Punjab National Bank. T.R. abbreviates Treasury Receipt. After depositing the amount the assessee can take credit of that amount in the PLA to be maintained by him. The assessee, thereafter, should apply to the jurisdictional Range Superintendent along with a receipted copy of TR-6 for allotment of PLA number. The PLA number is allotted by the Chief Accounts Officer and it takes normally a week's time for the allotment of the PLA number. The assessee must mention the PLA number on the TR-6. Even during the pendency of allotment of PLA number the assessee can effect clearances. The duty is to be deposited by the assessee by making a debit entry of the amount of duty in PLA account.
 
PLA is to be maintained in triplicate using indelible pencil and double side carbon. The assessee should periodically make credit in current account by depositing on TR-6 challans. There should always be sufficient balance in the account to cover the duty on the goods intended to be removed. The debit entry towards payment of duty of an amount exceeding the balance available in the current account means removal of goods without payment of proper duty and such acts are liable to penalties under the law.
 
Procedure of deposit of duty during strikes etc.
 
The following procedure may be followed for deposit of duty during sudden strikes, riots, imposition of curfew or natural calamities such as floods/cyclones etc.
 
  1. The assessee should send the cheque drawn in favour of the Chief Accounts Officer, Central Excise Commissionerate Delhi-I, C.R.Building, I.P.Estate, New Delhi by registered post acknowledgement due or through special messenger along with completed TR-6 challans in quadruplicate, with an undertaking that they have sufficient balance in their bank account and that they will bear the collection charges charged by the bank. A copy of such forwarding letter should also be handed over to the jurisdictional Superintendent.
  2. On the strength of the cheque so sent, the assessee may take credit in the PLA and clear the goods. The details with regard to the cheque and the particulars of the concerned assessee are intimated by the Chief Accounts Officer to the jurisdictional Superintendent.
  3. The duplicate and triplicate copies of the receipted challans are returned to the assessee for his reference and record and for preparing necessary monthly statements etc. Bank commission or collection charges, if any, are to be debited in the PLA. In case the cheque is dishonoured, the assesee is liable for penal action. This concession is not available to the assessees who work on overdrafts on their banks and are not able to give the declaration that they have sufficient balance in their account in the bank to meet the amount of the cheque.
Computerisation of records

The Central Excise department has no objection to accepting computerised documents issued by the manufacturers instead of the prescribed forms or records. The new rule 226A permits the above. Records can be kept on any electronic media and the electronic records must be kept even if a hard copy is kept. The print out (hard copy) of records and documents must be taken out at the end of each month and kept in bound folders separately for each type of record, return, document etc. Persons maintaining their accounts on computer must ensure that proper back up record is maintained and preserved for a period of 5 years counted from the first day of the Financial Year following the financial year to which a record etc. pertain. In case the department requires the records they must produce the same before Central Excise, Audit parties of the department or C & AG officers.
Refunds and Rebates
Meaning of refund
 
Section 11B of the Central Excise Act, 1944 provides the legal authority for claim and grant of refund of any Central Excise duty. The term refund includes rebate of excise duty paid on excisable goods exported out of India as well as of excise duty paid on material used in the manufacture of goods exported out of India.
 
Circumstances in which refund can be claimed.
 
A claim for refund of Central Excise duty arises in the following circumstances:
  1. money paid by mistake, clerical or arithmetical error or without authority of law, provided the same has not been collected from the buyer of the goods, as representing duty of excise;
  2. on return of the duty paid goods to the factory of manufacture for being remade, refined, reconditioned or subjected to any other similar process- the refund is subject to observance of conditions mentioned in Rules 173L or 97 of the Central Excise Rules, 1944;
  3. on finalisation of the provisional assessment refund of excise duty, if the assessee is found to have paid duty in excess;
  4. duty paid on non excisable goods or exempted goods or excess duty paid on account of misclassification or incorrect valuation of the goods;
  5. consequential refunds arising out of the orders in appeal issued by Commissioner (Appeals) or the CEGAT;
  6. in pursuance of any notification under section 11C of the Central Excise Act, 1944 providing exemption to any goods for a particular period if the duty has been paid contrary to a general practice;
  7. refund of Central Excise duty paid on sugar received for refining under Rule 100;
  8. refund of purchase price of unused or damaged Central Excise stamps in terms of Rule 99;
  9. rebate of duty paid on the excisable goods exported under Rule 12(1)(a);
  10. rebate of duty paid on material used in manufacture of goods exported under Rule 12(1)(b);
  11. refund of Modvat credit availed on inputs used in the manufacture of exported goods (under bond) as per provisions of Rule 57F(13) of the Central Excise Rules, 1944; and
  12. refund of unutilised advance deposits lying in balance in the current account.
Persons eligible for refund
 
Though section 11B of the Central Excise Act, 1944 authorises any person to apply for refund but the fact that the applicant is to furnish evidence of payment of excise duty in respect of which the refund is claimed restricts the scope of the term 'any person' used in the provision. Accordingly, in effect, a refund can be claimed only by the manufacturer. It is only in the case of exports under claim for rebate that an exception has been made to this principle. In that case, a merchant exporter is also entitled to claim rebate even though the duty has been paid by the manufacturer of the goods.
 
Procedure for claiming refund
 
An application for refund of duty is to be made in duplicate to the Assistant Commissioner of Central Excise having jurisdiction over the factory of the manufacturer, in the proper form. The application is to be accompanied by the documents evidencing payment of excise duty by the assessee and evidence showing that the incidence of duty has not been passed on to the customers.
 
The refund application is scrutinised and if it is found that the whole or any part of duty paid by the applicant is refundable is not hit by the provisions of unjust enrichment which means that the incidence of duty has not been passed on to the customer, an order is made in favour of the applicant. But if the refund is hit by the provisions of unjust enrichment, the amount so determined is credited to consumer welfare fund. Apart from the requirements laid down in section 11B certain procedural requirements have also been prescribed in the relevant provisions such as Rule 173L and notification no. 85/87 -CE dated 1.3.97 as amended issued under Rule 57F(13).
 
Refund-limitation and relevant date.
Under the provisions of section 11B, a claim for refund is maintainable only if it is filed within the period of 6 months from the relevant date. A claim filed after the stipulated period is barred by limitation. The relevant dates in respect of refunds arising out of various circumstances is defined under the section. The circumstances of refund and the corresponding relevant date are tabulated below:
 
S.No. Circumstances of refund Relevant date
1. Export rebate on final products or on the e materials used in their manufacture -
i) Export by Sea or air
ii) Export by land
iii) Export by post
Date of shipment
Date on which goods pass the frontier
Date of despatch by post office
2. Goods returned for being remade etc.
(Rule 173L)
Date of entry into the factory
3. Where refund is claimed by a person other the than the manufacturer Date of purchase of goods by such
Person
4. Refund on the basis of an ad-hoc exemption order under section 5A(2) Date of issue of the order
5. Any other case Date of payment of duty

The time limit of 6 months is however, not applicable where the duty is paid under protest in terms of Rule 233B of the Central Excise Rules, 1944.
 
Unjust enrichment.
 
Where the burden of duty has been transferred by the manufacturer to the buyer, the refund of duty to the manufacturer would lead to his unjust enrichment. The law does not permit such unjust enrichments. In such cases the refundable amount is credited to the consumer welfare fund. The burden of proof that the incidence of duty has not been passed on to the customer is on the manufacturer. However, in case of rebate of duty in the cases of exports, refund of unspent deposits lying in the PLA and the refund of credit of duty in terms of Rule 57F(13), the doctrine of unjust enrichment does not apply.
 
Rebate of Central Excise duty on the exported goods.
 
Under Rule 12, rebate of Central Excise duty is admissible to the exporters of the goods in respect of
  1. duty paid on excisable goods; and
  2. duty paid on material used in the manufacture of goods.
The exporter is required to furnish proof of export of goods on AR-4. The rebate of duty paid on the material used in the manufacture of goods exported is not admissible if the export has availed drawback under the Customs and Central Excise Duties (Drawback) Rules, 1995.
 
Recovery of duty erroneously refunded.
 
Where a refund of duty has been erroneously given, the refunded amount can be demanded by service of notice within 6 months from the date of such refund order. In case the refund has been taken on account of any fraud/collusion or any misstatement or suppression of fact or contravention of any Rule with an intent to evade duty, the notice can be issued up to a period of 5 years instead of 6 months.
 
Interest payable in cases of delay in sanctioning refund.
 
The authorities are obliged to sanction refund within 3 months from the date of receipt of all the requisite information or documents, failing which interest is payable to the claimant at the rate of 15% per annum.
Customs and Central Excise Laws and Procedures in Respect of EOU/EPZ Units
The 100% EOU scheme is, at present, governed by the provisions set forth under Chapter 9 of the Export and Import (EXIM) Policy, 1997-2002. The scheme facilitates the approved units in export of their entire production, subject to certain relaxation, indicating inter alia the conditions of approval of units, their operational framework, and the legal obligations cast upon them.
  1. The 100% EOU scheme offers to the EPZ units identical incentives and adopts the same production regime. Whereas the EOUs can be located at any place, the EPZs have been set up as enclaves separated from the domestic tariff area by fiscal barriers, which are intended to provide an internationally competitive duty free environment for export production at low costs.
  2. Under the 100% EOU scheme, even goods appearing in the restricted list of the EXIM Policy (1997-02) are permitted to be imported. However goods appearing in the prohibited list of the Policy are not permitted. It even allows duty free import of capital goods on loan basis.
Eligibility of units under the scheme
 
Paragraph 9.1 of the EXIM Policy, 1997-2002 states that the units undertaking to export their entire production of goods may be set up under the Export Oriented Units (EOU) scheme, Export Processing Zone (EPZ) scheme, Electronic Hardware Technology Park (EHTP) scheme, or Software Technology Park (STP) scheme. These units may be engaged in the manufacture, services, development of software, agriculture including agro-processing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisiculture, viticulture, poultry, and sericulture. Units engaged in manufacture of computer software may also be set up under any of the aforementioned schemes.
 
Legal Undertaking/Bonds under the customs provisions
 
Apart from the legal undertaking prescribed for an EOU/EPZ unit as per Paragraph 9.6 of the EXIM Policy, the unit is required to execute bonds/legal undertakings with the customs/central excise authorities, as follows:
  1. Bond for availing the duty exemption in terms of the relevant customs and central excise duty exemption notification.
  2. Warehousing bond under section 59 of the Customs Act, 1962.
  3. Bond under section 65 of the Customs Act, 1962 for obtaining sanction of the Assistant Commissioner of Customs for manufacture in bond.
  4. Transit bond under section 67 of the Customs Act, 1962 for the carriage of the goods from the place of import to the unit.
Vide Notification no.6/98 CE (NT) dated 2.3.1998 a bond titled B17 (General Surety/Security) has been notified. The bond covers all liabilities of the EOU/EPZ/EHTP/STP unit both under the customs and central excise Acts, as indicated in the Circular no. 14/98 dated 10.3.98 and related Circulars no. 66/88 dated 15.9.98 and no. 42/98 dated 19.6.98. Essentially, it is provided that:
 
The bond amount will be equivalent to the duty leviable on the sanctioned requirement of imported and indigenous capital goods plus the duty on the raw materials to be held in stock for six months only.
 
The units would be required to give either surety for the duty amount or furnish 5% of the bond amount as bank guarantee or any other approved government security.
 
Monitoring and administrative control
 
The EOU/EPZ units are administratively under the control of the Development Commissioner of the EPZ concerned.
On the policy front, all decisions relating to the EOU/EPZ units are taken by the Board of Approvals (BOA), set up under the Ministry of Commerce. The BOA is chaired by the Secretary, Ministry of Commerce and includes the Chairman, C.B.E.C. or his nominee as a member. In the case of units engaged in manufacture of electronic hardware and software the policy decisions are taken by the Inter Ministerial Standing Committee (IMSC) set up under the Department of Electronics and the same are implemented through its Designated Officers. Chairman, C.B.E.C. or his nominee is a member of the IMSC.
 
The administration of the provisions of the customs and central excise law in respect of the EOU/EPZ units is done by the Commissioners of Customs and Central Excise who work under the C.B.E.C.
 
As regards the EPZ units, an Assistant Commissioner of Customs is posted at the EPZ on deputation to the Ministry of Commerce. Accordingly, Circular no. 32/97 dated 1.9.97 lays down the responsibility of the Assistant Commissioner as well as the jurisdictional Commissioners of Customs in matters regarding the EPZ units.
Manufacturer Exporters and Merchant Exporter
"Manufacturer Exporter" means a person who manufactures goods and exports or intends to export such goods. "Merchant Exporter" means a person engaged in trading activity and exporting or intending to export goods.
 
Merchant Exporter can export the excisable goods either directly from the premises of the manufacturer, with or without sealing of the export consignments, or through his premises under claim for rebate or under bond.
 
Central Excise provisions for Export including those by Merchant Exporters.
 
Rule 12
 
It provides for grant of rebate of duty paid on excisable goods and 'duty paid on materials used in the manufacturer of goods when such goods are exported' outside India subject to notified conditions and safeguards. The Commissioner of Central Excise or as the case may be, the Maritime Commissioner of Central Excise has been empowered to relax any of the conditions laid down in any notifications issued under this Rule while considering the rebate claim. The definitions of the terms "manufacturer" and "materials" used in this Rule have been given wide connotation under the 'explanation' appended to the said Rule.
 
Rule 13
 
It provides for export of goods in bond without payment of duty from a factory of manufacture or a warehouse and use of non-dutiable materials in the production of export goods. The Central Government has issued relevant notifications and prescribed certain safeguards, conditions and limitations as regards the class or description of the goods or description of materials used in the manufacture thereof, distribution, mode of transport and other allied matters as specified in the notification. Notification No.47/94-CE (NT) dated 22.9.1994 as corrected by corrigendum Notification No.781 (E) dated 26.10.1994, as amended and Notification No.48/94-CE (NT) dated 22.9.94 as corrected by corrigendum Notification GSR No.742 (E) dated 6.10.94 and Notification GSR No.781 (E) dated 26.10.94, as amended, are some of the Notifications issued under Rule 13.
 
Procedure
 
Rules l85, 187, 187A, 187B and 189 prescribe the detailed procedure for export of excisable goods. The scheme of Self Removal procedure has also been introduced for export (except for the goods under physical control). It is now the option of the assessee either to clear the goods from the factory or the warehouse under AR.4 and intimate the fact of such clearance to the Range Superintendent or request the officer to examine and seal the goods and export the goods under official supervision.
 
Maritime Commissioners
 
At present there are 7 Maritime Commissioners of Central Excise viz. Mumbai, Calcutta, Madras, Panaji, Visakhapattanm, Cochin and Kandla. In fact, the Commissioners of Central Excise have been designated as "Maritime Commissioners".
 
Running Bond Account
 
Every Central Excise authority before whom a consolidated B1 general bond is executed shall maintain this account in the prescribed proforma. Suitable debit shall be made in the account whenever exports are allowed against the bond. Whenever any block transfer is made in favour of other Central Excise authority (example, another Maritime Commissioner), debit shall be made in this account on acceptance of the proof of export, the bond account shall be credited to the extent of the debit. The account shall also be credited after the block transfer is returned by the other authority.
 
Export by Merchant Exporters under bond for rebate of duty
 
Where exports are by Merchant Exporter, a Disclaimer Certificate in favour of the Exporter should be taken on each copy of AR 4. The procedure under the Board's Circular No. 81/81/94-CX dated 2S.11.1994 shall, mutatis mutandis, apply to such exports by Merchant Exporters.
 
Export by Merchant Exporters under bond without payment of duty
 
The procedure for export under Bond as laid down in Board's circular No.87/87/94-CX.6 dated 26.12.94 may be referred to:
 
Merchant Exporter can export excisable goods under bond executed by manufacturer. In such circumstances, the manufacturer who has executed bond would be responsible for discharging all the liabilities antler Central Excise Law and Procedure. In such cases, application in form AR-4 will be in the name of the manufacturer, who executes the bond. Once the manufacturer permits the bond executed by him for exports by Merchant Exporters, it would be manufacturer's responsibility for accountal of export goods.
 
Merchant Exporter himself can also execute a bond for export. Where he desires to export excisable goods manufactured in a factory or number of factories, he can execute a B.1 bond to cover a particular consignment or a consolidated B.1 general bond to cover a series of export consignment frown the same factory, before the Assistant/ Deputy Commissioner of Central Excise having jurisdiction over the factory.
 
Where the export is front a port, airport or post office falling within the jurisdiction of Maritime Commissioner of Central, the option is available to the Merchant Exporter to execute a particular bond or consolidated bond before the concerned Maritime Commissioner. In case of a particular B.1 bond, he should obtain an attested copy of the bond executed before the Maritime Commissioner and produce the same at the time of presentation of AR.4 to the Superintendent, Central Excise. Where consolidated B.1 general bond is executed, he shall inform Maritime Commissioner of his intention to export the goods and obtain a Certificate of provisional debit in the Running Bond Account. This Certificate will have to be produced by him before the Superintendent of Central Excise at the time of presentation of AR.4 for signature. In above situations, the exports are expected to be made through the Port of the Maritime Commissioner before whom the bond is executed. The relevant AR.4 has to be signed by both the Merchant Exporter and actual manufacturer.
 
Block Transfer of Bond Account
 
In case of Merchant Exporters, they can execute B.1 general bond with a particular Maritime Commissioner. However, the goods may have to be exported from Port/Airport/Post Office under the jurisdiction of another Maritime Commissioner.
  1. In such cases, Merchant Exporter has to obtain "Block Transfer of Credit in Running Bond Account" in favour of Maritime Commissioner having jurisdiction over the Port/Airport/Post Office from which the goods are being exported.
  2. Intimation of such Block Transfer will also be given by Maritime Commissioner to Superintendent of Central Excise having jurisdiction over the factory/warehouse. Similarly, if the goods are to be exported from the Port/Airport/Post Office which is not under the jurisdiction of any Maritime Commissioner, the Merchant Exporter will have to obtain "Block Transfer of Credit" in "Running Bond Account" in favour of the Assistant/Deputy Commissioner having jurisdiction over the factory of manufacturer.
  3. Once the Block Transfer Credit is made, it will be treated as if Merchant Exporter has executed bond for that amount. Proof of export will have to be submitted to the authority (i.e. Maritime Commissioner/Assistant Commissioner) in whose favour the "Block Transfer Credit" has been made and they will keep control over the bond monitoring proof of export. However, if the goods are not actually exported, action for recovery will have to be initiated by the Maritime Commissioner of Central Excise before whom bond has been executed.
Small Scale Exemption Scheme
The contribution of Small Scale Sector in the industrial growth of the Indian economy and to the Gross Domestic Product is significant besides the potential for employment generation. The Small Scale Sector has for itself a special dispensation in the Central Excise law in order to make it competitive in the domestic and global market. Central Excise duty concessions have been extended to the units in the small-scale sector based on their turnover so as to facilitate them to graduate by availing these concessions in a graded manner.
 
Eligiblity
 
Manufacturers of specified commodities having clearances not exceeding Rs. 3 crores in the preceding Financial Year are eligible for this exemption.
 
Registration of Small Scale Companies
 
Every manufacturer of excisable goods is required (under Rule 174 of Central Excise Rule 1944) to get registered with the Central Excise Department before starting production.
  1. The SSI must file for registration when their turn over crosses Rs. 1 Crore only. The application for the registration should be submitted to the jurisdictional Range Superintendent of Central Excise.
  2. The Registration Certificate will be automatically granted. If it is not granted within 30 days of the receipt of the application it is deemed to have been granted.
  3. There is no fee for registration and a factory or a unit is to be registered once only. There is no need for renewal of the registration.
  4. The registration is applicable only for the premises where the manufacture is taking place.
  5. A separate registration is required for each premise.
  6. Case a new product is to be manufactured, the registration certification should be got endorsed for the additional items.
Exemption from registration
 
The requirement of registration has been exempted for the following persons.(Notification No. 22/98 CE(NT) dated 4.6.98 as amended)
 
Manufacturers who are only manufacturing goods, which are exempted from payment of duty of Central Excise.
 
For small scale industries who are manufacturing goods up to an aggregate value of less than Rs. 90 lacs. After crossing Rs. 90 lakhs turn over the SSI must file declaration.
 
In case an SSI is manufacturing goods of more than 30 lacs he must file a declaration only once. (the form is enclosed).
 
Who is covered by the SSI scheme
 
At present, in terms of notification nos. 8/2000-CE and 9/2000-CE, both dated 1st March, 2000, and effective from 1st April, 2000, a general small scale excise duty exemption scheme has been made operational providing slab-rated concessions from excise duty in respect of clearances of specified excisable goods.
  1. Under these notifications, all goods specified in the First Schedule to the Central Excise Tariff Act, 1985 are eligible to avail the exemptions/concessions except for those goods which are chargeable to NIL rate of duty or which are exempt from whole of the duty and certain products as given in the Annexure to these notifications.
  2. With effect from 1st April, 2000, the hitherto commodity specific exemption schemes for SSI units manufacturing cosmetics, refrigerating and air conditioning equipment, tread rubber and for articles of plastics have also been merged with the general small scale exemptions, as provided under the aforesaid notifications.
The salient features of these exemption schemes, as contained in the aforesaid notifications are as under:
  1. Where the SSI unit does not avail CENVAT
    Notification No.8/2000-CE, dated 1st March, 2000 as amended. For first clearances effective from 1st April of a financial year up to an aggregate value of Rs. 1 Crore, duty is exempted in respect of those SSI units which do not intend to avail CENVAT up to a value of clearances of rupees one crore.
  2. Where the SSI unit avails CENVAT
    Notification No.9/2000-CE, dated 1st March, 2000 as amended. The graded scheme of exemption in respect of those SSI units which intend to avail CENVAT is as under:
Sr. No. Value of Clearances Rate of Duty
  1. First clearances effective from 1st April of a financial year Up to an aggregate value of Rs.1 crore 60% of the normal rate of duty
  2. Subsequent Clearances at the normal rate of duty

The following clearances are excluded from computation of value of clearances

  1. Clearances of the specified goods which are used as inputs for further manufacture of specified goods within the factory irrespective of the value of clearances.
  2. Clearances of excisable goods affixed with the brand name or trade name of another person who is not eligible for availing the exemption under the aforesaid notification. However, the clearances of goods affixed with the brand name or trade name of another person - other than those which are in the nature of components or parts of machinery or equipment for use as original equipment in the manufacture of the said machinery, goods bearing the brand name of KVIC, NSIC or a State Small Industries Corporation or State KVIB or those goods manufactured in a factory located in a rural area are not eligible for the exemption/concession from excise duty irrespective of the value of clearances.
  3. Clearances which are fully exempt from excise duty under any other notification (other than those giving exemption based on quantity or value of clearances).
The conditions for availing the aforesaid exemption/concession from excise duty are as under
  1. The aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory by one or more manufacturers does not exceed rupees three hundred lacs in the preceding financial year.
  2. The manufacturer does not avail of the credit of duty under the CENVAT scheme upto an aggregate value of clearances of rupees one hundred lacs.
The thresholds of excise duty concessions under the aforesaid small-scale schemes act as a ladder for enabling the small units to grow and graduate into bigger units.
 
Units availing SSI exemption are permitted to remove specified goods to a place outside the factory for getting any job work done on any specified goods without payment of duty (Notification number 83/94 and 84/94 Central Excise dated 11.4.94 as amended)
How To Avail Cenvat/Capital Goods Credit
  1. The Cenvat scheme is a system whereby a manufacturer can avail of credit of the duties paid by a manufacturer of his raw materials, inputs, parts and components or his capital goods to pay his own Central Excise Duty.
  2. This is intended to ensure that no manufacturer is forced to pay duty on the duty portion of his product. Briefly, in order to avail the CENVAT credit, the goods manufactured or produced have to pay duty. All inputs if used in the manufacture of the final product are eligible for Cenvat {except high-speed diesel oil and motor spirit (petrol)}.
  3. All capital goods actually used in the manufacture of the final products are also eligible.
  4. All finished goods are eligible for the benefit of Cenvat except matches. However, availment of Cenvat on capital goods will be spread over two years, half in the first year.
  5. A manufacturer availing cenvat on capital goods must not avail depreciation under the income tax act on the duty part of the cost of the capital goods.
  6. An SSI (Small Scale Industry) who is to take the benefit of Cenvat scheme must give a letter of C.Ex. and maintain the appropriate registers. Before availing cenvat, the SSI must physically receive the goods under a duty paying document or a proper invoice issued by a registered dealer. The SSI must maintain an registers giving details of receipt and disposed of inputs & capital goods and payment of duty by credit. Registers. Once he has availed cenvat on a duty paying document the documents must be defaced so that it can not be used again. These duty paying document already defaced and the record along with his own delivery documents must be shown to the Central Excise officers on demand. There is a provision for removing raw materials, inputs or capital goods on which cenvat credit has been taken out of the factory for further processing, repairs or job work. Details of the cenvat scheme may be obtained from the local Central Excise officer. Please note that when duty is being paid vide cenvat credit, the credit accruing on goods received after the last day of the month in which duty is due to be paid, can not be utilized. (CBEC's circular 542/38/2000-Cx. Dated 25.8.2000)
Search, Seizure, Arrest, Offence, Penalty, Prosecution
In every statute, to ensure due compliance of law, preventive and investigative provisions are incorporated. Under the Central Excise Act, 1944 and the Rules made there under for collection of appropriate amount of excise duty the preventive and investigative provisions such as search, seizure, summons, arrest are provided for. Some of these measures are not expressly provided under the Central Excise Act, 1944 but have been adopted from the Customs Act, 1962 vide notification no. 68/63-CE dated 4.5.63 as amended issued under section 12 of the Central Excise Act, 1944.
 
Search
 
An officer not below the rank of Inspector of Central Excise, duly authorised can search at any time, any premises where the officer authorising search has reason to believe that excisable goods are manufactured or stored in contravention of the provisions of the Act or Rules or where he has reason to believe that the evidence pertaining to manufacturing and removal of such goods is available. The authorisation for search is called Search Authorisation or Search Warrant. For a registered premises or for stopping and searching any conveyance in transit no such warrant is required. The Search warrant is issued by an officer not below the rank of the Assistant Commissioner. The search is to be carried out in the presence of two independent witnesses.
 
Seizure
 
Whenever after the search of the premises or a conveyance, a proper officer of Central Excise, i.e. an officer not below the rank of Inspector forms a reasonable belief that the goods liable to confiscation or the documentary evidence pertaining to evasion of Central Excise duty is available in the premises or conveyance searched, he can seize the goods as well as the documents under section 110 of the Customs Act, 1962 as made applicable to the like matters of Central Excise. The instrumentality of the seizure is a panchanama drawn on the spot in the presence of two independent witnesses. After seizure the proper officer either takes charge of the goods or keeps the offending goods in the custody of any person for safe keeping under a superdginama. The law, however, provides for the provisional release of the goods seized, pending the order of adjudication, on execution of a bond and deposition of such security as the officer competent to adjudicate the case may require.
 
Summons
 
Under section 14 of the Central Excise Act, 1944, Superintendent or any officer senior to him, can issue summons to any person requiring him to give evidence or to produce any record etc. The persons so summoned are bound to attend and give their truthful statement and produce the summoned records/documents etc. The statement tendered under section 14 is admissible as evidence in a court of law. The summons are to be issued in writing and must bear the signature of the officer issuing it as well as his official seal, if any. At the stage of investigation under this provision, the person summoned has no right to have his lawyer present during the questioning by the officer.
 
Arrest
 
Any officer not inferior in rank to an inspector is authorised to arrest any person whom he reasonably believe to be liable to punishment under the Central Excise Act, 1944. The person is to be produced before the Magistrate within 24 hrs. of his arrest.
 
Offences
 
In the absence of any express definition of the term Offence in the Central Excise law, any violation of the provisions of the law would be construed as an offence. Whether or not any offence has been committed by an assessee is to be adjudged through a process of adjudication in accordance with the principles of natural justice. The law envisages action both in respect of offending goods and the offender.
The Central Excise Act also provides for initiation of prosecution proceedings in certain cases, depending upon the gravity of the offence. Prosecutions are launched by the department through complaints in the competent jurisdictional courts leading to the trial of the accused person. If found guilty, such persons may be punished with fine or imprisonment or both.
 
Fines and penalties
 
The Central Excise Act, 1944 and the Central Excise Rules, 1944 provide for following categories of fine or penalties
  1. penalties on the persons who are responsible to conduct the business of the company or firm, which may include their managers, partners or directors;
  2. penalties on persons who abet any of the offences mentioned in Rules or Section 9 of the Act;
  3. penalties on the companies and firms;
  4. confiscation of the goods in respect of which the offence has been committed or the duty has been evaded;
  5. confiscation of the land, building, plant, machinery etc. used in connection with the manufacture, production, storage, removal or disposal or excisable goods; and
  6. penalty on a person for obstruction or giving false or misleading information.
Besides these fines and penalties, the Act provides powers under section 9(B) to publish name, place of business of persons convicted under the Act.
 
The property of the confiscated goods vests with the Central Govt. The owner of the goods, however gets an option to redeem the goods on payment of fine imposed by the competent adjudicating authority.
 
The evasion of Central Excise duty is considered a very serious offence and penalty imposable in certain serious cases is equivalent to the amount of duty evaded. It is, therefore, desirable that the assessee should ensure proper maintenance of Central Excise records, payment of proper duty at proper time and due observance of the provisions of law. The law also contains provisions for charging of interest where the duty is not timely paid.
 
Prosecution
 
Besides the departmental adjudication, prosecution can also be launched under Central Excise Act, 1944 for offences described under section 9(1) of the Act. The law also provides for prosecution against any person, director, manager, secretary or other officer of a company or partner of the firm or proprietor of a concern who is responsible for the conduct of the business of the company/firm/concern and is found guilty of the offences under the Central Excise law.
 
The prosecution proceedings are generally initiated in serious cases having substantial revenue involvement.
 
If as a result of the trial the charges made in the complaint against the accused are proved the court may award the following punishments
  1. imprisonment up to 7 years depending upon the gravity of the case;
  2. imposition of fine as per the provisions;
  3. forfeiture of any goods in respect of which the court is satisfied that an offence has been committed- this may include vehicle used for carrying such goods, packages used for packing such goods and implements or machinery used in the manufacture of such goods; andpublication of name, place of business etc. of persons convicted under the Act.
Rights in Case of A Raid
WHAT IS A SEARCH
 
It is necessary that you, the person being searched, know the law and procedure relating to a search. Such knowledge-base helps you safeguard your legal rights.
 
YOUR RIGHTS DURING A SEARCH
 
Never forget that by searching your premises the officers are carrying out an official duty and are, therefore, bound by certain rules and regulations that are meant not only to further their official purpose but also to safeguard your rights and interests. It is important to keep it in mind that the only purpose of their visit is to look for and collect evidences of violations and, they have no right to: 
  1. Mess up with your daily activities like production, sale or clearance;
  2. Stop you from communicating with your legal advisor, business partners, clients, friends or relatives;
  3. Carry out their search in a surreptitious manner without allowing you or your employee to see what they are doing;
  4. Execute their search without identifying themselves individually so as to prevent any complaint of a misconduct;
  5. Prevent you or your employees from leaving the premises. (However, while leaving you might be required to give the phone number or the address of your destination, if asked for, so that they can contact you in case a clarification is required) 
At the entry point of your premises, you are well within your rights to: 
  1. Ask each of the officers to identify himself by showing his identity card. (This should obviously be done with utmost politeness so as to prevent any kind of confrontation. Remember that causing obstruction to an officer in the conduct of his official duty is also an offence. But it is equally important to know the authority of the raiding party);
  2. Politely ask the leader of the team to show you the search warrant before the search operation commences. Remember, a search can be carried out only if the visitors have been authorised to do so by an Assistant Commissioner of the department or an officer of a rank higher than that. There are several instances of officers conducting a search without any authority (i.e. search warrant); 
Sometimes officers take a plea that your factory or godown is registered with the department so they need not carry a search warrant. Unless they have the authorisation papers they cannot do it. Save the raiding team is being led by an Assistant Commissioner or above. Since the officer is vested with the power to authorise his subordinates to conduct a search, there is no point in asking for a search warrant. If a search warrant has been issued, it should clearly give the name and the address of the premises to be searched. This is a legal requirement which is often violated by the officers. A proper search warrant filled up and signed by the authority is the first requirement. Sometimes it has been seen that after entering your premises officers try to fill up a blank search warrant already bearing the signature of the Assistant Commissioner. This is nothing but a serious irregularity which an assessee should bring to the notice of the higher-ups in the department.
  1. In case of the premises under search is residential, where women reside, no search can be carried out unless the search team includes a lady. Rooms of ladies can only be searched in the presence of the lady members of the search team.
  2. It is your right to carry out a personal search of the members of the search team (a lady can only be search by another lady). This is a legal safeguard provided to you to prevent planting of evidence against you.
  3. You must insist (for it is your right) that the search operation is conducted in the presence of at least two independent witnesses. In Northern India these witnesses are called the pancha and the entire search operation is known as panchnama proceeding. In fact the officers are legally bound to conduct the entire operation in the presence of these witnesses who, at the end, record the entire happening in a narrative form called the Panchnama. The officers themselves are not supposed to record the event and, it is this Panchnama which becomes the official record of the entire episode and is used as the evidence. 
In fact the Panch ( five ) witnesses should be present during the entire operation and not brought into the scene only after the officers have conducted their search and have ghost written the panchnama. Many times illiterate persons, or people who are known to the officers (some worker of the adjacent factory, a known chaiwala, or anybody who, the departmental officers feel, would not go against the official version) may be called to become the panch witness. This is totally wrong. You must insist that at least persons of reasonable literacy, intellect, knowledge and certain credibility should be present through out the proceeding. They should be independent in the sense that they should neither be your relative, partner, employee or legal counsel nor should they be the persons inclined to tow the line of the officers if later called upon to reiterate the happenings. Many a times after a search operation is complete and panchnama drawn you realise that it contains things that were not there or did not occur. Such situations can be avoided if the persons acting as witnesses are really independent and were present through out. 
  1. Sometimes the officers may inform you that they are going to seize your goods. Seizure of goods is resorted to when their quantity differ from the recorded balance and when they are found to have violated some central excise law (Goods can also be seized as an evidence or for carrying out tests, but in those cases only samples of the goods are seized). It is your right that before effecting any seizure, the officers explain to you the exact nature of irregularity or the violation that they have in mind. If you have an explanation to offer, do so before the witnesses. If the officers are not convinced with your argument and still proceed to seize the goods you can insist upon recording your explanation in the panchanama. It may help you in future. In any case you must ensure that the correct inventory of the goods are recorded in the panchnama.
  2. Upon completion of the search, when the officers collect the evidences in the form of documents and records, you should be alert and vigilant. The records should be properly numbered and listed in the panchnama and only listed documents and records may be taken away by the officers. As for the goods seized, they are never taken away except as samples. The seized goods are generally left with the owner himself under a 'superdiginama' with a direction not to use or dispose off without the permission of the department.
  3. Further, upon completion of the search, the officers will submit themselves to a personal search by you. This is a right of the searched person, which may be exercised.
  4. Finally, you must insist that a copy of the signed panchnama be given to you at the end of the search. 
YOUR DUTIES DURING A SEARCH
 
Whereas you should be firm on safeguarding your legal rights, there is no reason why you should be impolite. Hence, it is your duty to assist the officers in stocktaking, scrutiny of documents and preparation of panchnama.
 
TIPS TO AVOID INCONVENIENCE 
  1. During the search operation, the officers fan out to various palaces, your shop-floor, factory office and store-room to take stock of the raw material and the finished goods, to recover papers and documents, to open your computers. It is always advisable to instruct your trusted employees to accompany the officers and assist them in their work. It helps in many ways. The officers get a feeling that you are assisting in their work; it makes their life simpler as they can ask the person to take out the relevant record; it reduces the mess that is otherwise created during a search operation by the officers pulling all types of records and documents; and it also keeps a check on them as to what they are looking at or what they are doing. As for the stock-taking of goods only the concerned person like the stores' in-charge should be sent. 
Many assessees insist upon calling their legal counsel during the search operation. This is not a very good idea. It must be understood that search operation is primarily to gather evidences i.e. facts. At this stage the legal points are not of much relevance. Therefore, the presence of a legal counsel is not of much help. In fact it may aggravate the situation further if your legal counsel believes in starting an argument on legal issues there itself and the officers feel his presence to be annoying. Ideally you should handle a search operation yourself and consult him after the operation, giving him the details of the happenings.
 
Finally, you should keep it in mind that no extra duty can be charged from you nor can you be penalised under the law unless there is short payment of duty or certain irregularity and evidence to this effect. Therefore, the same law which empowers the central excise officers to search your premises is your biggest safeguard. This should be your talisman.
Appeals
Appeals to Commissioner (Appeals)
  1. If any person is aggrieved by any decision or order passed under the Excise Act, by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) within three months from the date of the communication to him of such decision or order:

However the Commissioner may, allow it to be presented within a further period of three months, if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the aforesaid period of three months. 

Appeals to the Appellate Tribunal
 
An appeal lies to the Appellate Tribunal against any of the following orders 
  1. a decision or order passed by the Commissioner of Central Excise as an adjudicating authority;
  2. an order passed by the Commissioner (Appeals)
  3. an order passed by the Central Board of Excise and Customs or the Appellate Commissioner of Central Excise under section 35, as it stood immediately before the appointed day;
  4. an order passed by the Board or the Commissioner of Central Excise, either before or after the appointed day, under section 35A, as it stood immediately before that day:
Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,-
  1. a case of loss of goods, where the loss occurs in transit from a factory to a warehouse, or to another factory, or from one warehouse to another, or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse;
  2. a rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India;
  3. goods exported outside India (except to Nepal or Bhutan) without payment of duty;
  4. credit of any duty allowed to be utilised towards payment of excise duty on final products under the provisions of this Act or the rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under section 109 of the Finance (No. 2) Act, 1998;
Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where-
  1. in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or
  2. the amount of fine or penalty determined by such order, does not exceed fifty thousand rupees.
(1A) Every appeal against any order of the nature referred to in the first proviso to sub-section (1), which is pending immediately before the commencement of section 47 of the Finance Act, 1984, before the Appellate Tribunal and any matter arising out of, or connected with, such appeal and which is so pending shall stand transferred on such commencement to the Central Government, and the Central Government shall deal with such appeal or matter under section 35EE as if such appeal or matter were an application or a matter arising out of an application made to it under that section.
 
(3)Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the the other party preferring the appeal.
 
(4)On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections.
  1. An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made on or after the 1st day of June, 1993, irrespective of the date of demand of duty or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,- 
    1. where the amount of duty demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is one lakh rupees or less, two hundred rupees;
    2. where the amount of duty demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than one lakh rupees, one thousand rupees: 
Provided that no such fee shall be payable in the case of an appeal referred to in sub-section (2) or a memorandum of cross-objections referred to in sub-section (4).
 
Revision by Central Government.
 
(1) The Central Government may, on the application of any person aggrieved by any order passed under section 35A, where the order is of the nature referred to in the first proviso to sub-section (1) of section 35B, annul or modify such order.
 
Provided that the Central Government may in its discretion, refuse to admit an application in respect of an order where the amount of duty or fine or penalty, determined by such order does not exceed five thousand rupees.
 
Explanation.-For the purposes of this sub-section, "order passed under section 35A" includes an order passed under that section before the commencement of section 47 of the Finance Act, 1984 against which an appeal has not been preferred before such commencement and could have been, if the said section had not come into force, preferred after such commencement, to the Appellate Tribunal.
 
(1A) The Commissioner of Central Excise may, if he is of the opinion that an order passed by the Commissioner (Appeals) under section 35A is not legal or proper, direct the proper officer to make an application on his behalf to the Central Government for revison of such order.
 
(2) An application under sub-section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made:
 
Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, allow it to be presented within a further period of three months.
 
(3) An application under sub-section (1) shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall be accompanied by a fee of,- 
  1. two hundred rupees, where the amount of duty and interest demanded, fine or penalty levied by any Central Excise Officer in the case to which the application relates is one lakh rupees or less;
  2. one thousand rupees, where the amount of duty and interest demanded, fine or penalty levied by any Central Excise Officer in the case to which the application relates is more than one lakh rupees:
    Provided that no such fee shall be payable in the case of an application referred to in sub-section (1A). 
(4) The Central Government may, of its own motion, annul or modify any order referred to in sub-section (1).
 
(5) No order enhancing any penalty or fine in lieu of confiscation or confiscating goods of greater value shall be passed under this section,- 
  1. in any case in which an order passed under section 35A has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value; and
  2. in any other case, unless the person affected by the proposed order has been given notice to show cause against it within one year from the date of the order sought to be annulled or modified. 
(6) Where the Central Government is of opinion that any duty of excise has not been levied or has been short-levied, no order levying or enhancing the duty shall be made under this section unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in section 11A.
 
Deposit, pending appeal, of duty demanded or penalty levied.- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, a person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied:
 
However where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.
 
Statement of case to High Court.
 
An appeal lies to the High Court against the order of the Appeallate Tribunal, within sixty days of the date upon which notice of an order under section 35C passed before the 1st day of July, 1999 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment).
 
The Appeal is by application in the prescribed form, accompanied, where the application is made by the other party, by a fee of two hundred rupees, (2).
 
Appeal to the Supreme Court
 
An appeal shall lie to the Supreme Court from- 
  1. any judgment of the High Court delivered on a reference made under section 35G or section 35H in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after the passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or
  2. any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. 
Exclusion of time taken for copy
 
In computing the period of limitation prescribed for an appeal or application under this Chapter, the day on which the order complained of was served, and if the party preferring the appeal or making the application was not furnished with a copy of the order when the notice of the order was served upon him, the time requisite for obtaining a copy of such order shall be excluded.
Types of Bonds For Export
There are six types of bonds for due despatch of goods for export:
 
B1 (Surety)
B1 (Security)
B 1 (General Surety)
B 1 (General Security)
B 1 6(General Surety)
B16 (General Security)
 
Exporters have option to execute a general bond (B1 General) or bond (B1) to cover a particular consignment. For particular B-1 bond, amount of bond should be equal to at least the duty on the goods to be exported. For general B-1 bond, the amount of bond would be equal to the full duty on the exporter's estimate of the maximum quantity of the excisable goods likely to be in transit during the period between the clearance from the factory and acceptance of proof of export.
 
Rule 13 provides for execution of bond for a particular consignment while Rule 14 provides for export under a general bond - the consignments being despatched from time to time.

Bond in form B16 is a general bond (with surety/security) covering Rule 9B, 13, 14 and 192 for obtaining provisional assessment of goods under Rule 9B, for removal from time to time for export to a foreign country without payment of duty and for due accounting and disposal of excisable goods obtained without payment of the whole or part of duty for use in special industrial purpose under Chapter X of Central Excise Rules, 1944. The manufacturer exporter who has executed B-16 bond is not required to execute export bond to cover duty on goods exported without payment of duty.

Amount of Security or Bank Guarantee
 
Manufacturer exporters may execute B-1/B-16 bond with 10% security/bank guarantee. Merchant exporters have to execute B-1 bond with 25% security/bank guarantee.
 
Earlier the following categories of exporters were not required to furnish any security or bank guarantee and they were required to give only the bond with surety.
  1. Superstar trading houses
  2. Star trading houses.
  3. Trading houses.
  4. Export houses.
  5. Registered exporters (registered with relevant Export Promotion Council).
Vide Board's F.No.209/54/96-X.6 dated 31.12.1996 (Circular No. 284/118/96CX) it has been decided that bond may be taken without security/surety in case of the following categories of exporters:
  1. Super Star Trading Houses
  2. Star Trading Houses.
  3. Export Houses.
  4. Registered exporters (Registered with Export Promotion Council).
  5. Manufacturers registered with Central Excise Department.
Subject to the condition that:
 
The exporters have not come to the adverse notice of the Department in the last three years.
  1. All the formalities required under Central Excise Acts and Rules related to exports are regularly complied with by the exporters.
  2. A copy of the registration-cum-membership certificate (RCMC), duly attested by the exporter is submitted.
  3. This facility can be withdrawn without prior notice to any exporter if he comes to the adverse notice of the Department

The criterion for recognition as Export House, Star Trading House or Super Star Trading House is either on the basis of FOB value or Net Foreign Exchange (NFE) earned on export of goods and services, including software exports (realised in freely convertible currency) during the last three licensing years or the preceding licensing year, whichever is opted by the exporter. Deemed Exports, However, shall not qualify for the purposes of recognition.

"Deemed Exports" means those transactions in which the goods supplied do not leave the country and the payment for the floods is received by the supplier in India (example supply of goods to units located in EPZ or to Export oriented Units etc).

Addresses
CUSTOMS EXCISE & GOLD (CONTROL), APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K.PURAM, NEW DELHI - 66

 Justice K.Sreedharan - President 
 011-6106742,  6109127(Fax)
 Ms.Jyoti Balasundaram - Member (J)
 011-6104079
 G.A.Brahma Deva - Member (J) 
 011-6103322
 Lajja Ram - Member (T) 
 011-6108518
 G.R.Sharma - Member (T) 
 011-6108237
 S.S.Kang - Member (J) 
 011-6105874
 A.C.C.Unni - Member (J) 
 011-6108426
V.K.Agarwal - Member (T) 
 011-6101596
C.N.B.Nair - Member (T) 
 011-6105230
P.G.Chacke - Member (J) 
 011-6100201
P.S.Bajaj - Member (J) 
 011-6109941
B.K.Mitra - Registrar 
 011-6109589
S.Chandran - Dy Registrar     
 011-6101583

CUSTOMS, EXCISE AND GOLD (CONTROL) APPLELLATE TRIBUNAL, 3RD FLOOR, P.N.B.HOUSE, SIR P.M. ROAD, FORT, MUMBAI - 400 001

Gowri Shankar - Member (T) 
022-2641963
J.H.Joglekar - Member (T) 
022-2662796
G.N.Srinivasan - Member (J) 
022-2641965
J.N.Srinivasan Murthy - M(J) 
022-2664835
B.B.Kadam - Technical Officer 
022-2664939
P.S.Khade - Asstt. Registrar  
022-2641964
 
CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, 'SHASTRI BHAVAN' ANNEXE 1ST FLOOR, CHENNAI - 600006

S.L.Peeran - Member (Judicial) 
044-8252915
V.K.Ashtana - Member (Technical)  
044-8252994
Gowri Shankar - Member (T)  
044-2641963
G.N.Srinivasan - Member (J)  
044-2641965
J.N.Srinivasan Murthy - Member (J)  
044-2664835
B.B.Kadam - Technical Officer  
044-2664939
P.S.Khade - Assistant Registrar   
044-2641964


SOUTH REGIONAL BENCH, SHASTRI BHAWAN, ANNEXE BULDING 1ST FLOOR, 26, HADDOWS ROAD, CHENNAI

S.L.Peeran - Member (J) 
044-8252994
V.K.Ashtana - Member (T) 
044-8252915
A.Mohan Kumar - Asstt. Registrar  
044-8252306


EAST REGIONAL BENCH, 7TH FLOOR, BAMBOO VILLA, 169, A.J.C. BOSE ROAD, P.O. BOX NO. 11223, INTALLY POST OFFICE, CALCUTTA - 700014

Ms.Archna Wadhwa - Member (J) 
033-2456887
Debashish Chatterjee - Technical Officer 
033-2449853
 

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