CA Final Idt Flow Charts May 2015

Indirect taxes
Flow charts
May 2015 exams
CA N.Rajasekhar M.com FCA DISA (ICAI)
Chennai.
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Service Tax - Basics 1
Service Definition
Sec 65B (44)
Activity for consideration From one person to other

Service include Declared Service
Service exclude
Sale transaction (both movable and immovable)
Deemed sale transaction (lease, Hp, Material portion of works contract etc)
Services of employee
Transactions only in money
Services of MP, MLA, MLC, Govt. Nominated persons /Constitution posts,
Services of tribunal court (appeal fee is not a consideration)
CA N.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
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om
Activity
One person to
Other
Work done, deed done, Act

done, Performance, execution
etc
Means
1. Existence of two parties is must(SP & SR)

2.Self service not taxable (ex HO to branch)
The word person has been defined.
Exception
1. Unincorporated Body and members are different persons
2.Ho Outside Taxable territory and Branch in Taxable territory different persons
In above cases services are taxable
Cash,Cheque,
Negotiable instrument
Supply of goods and
Includes
Nonservices in return of
Monetary
service
Doing, not doing,
forbearance,refrain of act
Monetary
Service
(3)
Consideration
Activity Without Consideration

Or Consideration without Activity
Not a service
No Service tax
Examples
1. A without C: Govt. Services, free access to channels ,free tourism information, street
performances
2.C without A: Gifts, Exgratia payments, tips, Donations without conditions
(4)
Service include
declared service
Services
taxable
Total 9 Services Specified:

Renting of Immovable property
Construction, IT, Service portion of
WC, HP, lease etc.,
Sale of goods/ immovable property)/

Deemed sales (WC, HP, Lease, food
(5)
Service
Excludes
NO
ST
Services of employee
Transactions only in money/Actionable
claims Ex: Deposits, withdrawals, Discharge
of liabilities
Services of MP,MLA,MLC,Corporater,Govt
nominated posts/Constitutional posts
Services of Court/Tribunal
Service Tax Charging Section

(1)
ST Charging Sec
66B
(2)
(3)
(4)
(5)
When Change in rate, rate to be

determined as per POT Rules
Rate of ST 12.36%
Levy (liability)on Value of
services
Other than Negative list
No Levy on Negative list services(17

Services)
Value to be determined as per S.T
Valuation Rules
Advance received liable for ST
Advance retained after cancellation
also liable for ST
Payment to be made on
Services agreed to
provided/ to be provided
Liability only when
Service rendered in
taxable territory
Taxable territory= India excluding J

& K, Sea up to 200 Nautical miles.
Timing of payment as per
Point of Taxation Rules/
Service Tax rules
Collection of ST as per
Prescribed manner
ST- Interpretation /Classification- Sec 66 F

(1)
Exemption to main service does

not mean exemption to auxiliary
service used for main service
Rules of
Interpretation
(2)
CA N.Rajasekhar
FCA,DISA(ICAI) Chennai
9444019860,
rajdhost@yahoo.com
When service capable of

differential treatment, Prefer
Specific description rather than
general Description
When there is no Specific

description under (2) as
above, classify as below
(3)
Classification of
Bundled services
(Composite service )
Ex. Package Tour,
Ex. When transport of goods

service is exempt. Service of agent
to facilitate transport is not
exempt.
Ex. When Hotel Provides

Convention service with food,
it is Convention service. It is
not a Mandap service or
catering service
Ordinary course of
Business
Classify as single
service based on
Essential character
Not in the Ordinary

course of business
Classify as Service which gives highest

rate of Service tax
DeclaredServices/NegativeList/ExemptedServices
I.RentingofImmovableProperty
DeclaredService
NegativeList
ExemptionList
1RentingbyHotels/restaurants/
conventioncenters
2.Rentingforcommercialpurpose
afterissueofcompletionCertificate
3.OtherthancoveredinNegative
andexemptionlist.
1.RentingVacantland,buildingto
agriculture
2.RentingforResidencepurpose
3.RentingbyRBI
4.RentingbyGovt/LAtoNon
businessentity
CaseStudies
Description
Rentingofpropertytoaneducationalbody
Rentingofvacantlandforanimalhusbandryor
floriculture
Permittinguseofimmoveablepropertyforplacing
vending/dispensingmachines
Allowingerectionofacommunicationtoweronabuilding
forconsideration
Rentingoflandorbuildingforentertainmentorsports
Rentingoftheatresbyownerstofilmdistributors
(includingunderaprofitsharingarrangement)
Lettingouttheirhalls,roomsetc.forsocial,officialor
businessfunctionsorlettingoutofhallsforcultural
function
1.Rentingofprecinctsofreligious
placeforgeneralpublic
2.Rentingofhotel,guesthouse
whendeclaredtariffis<Rs.1000/
3.RentingtoExemptedEducational
Institute.
Natureofservice
Exemptedserviceif
educationbodyis
exemptedservice
Negativelist
Taxability
Nottaxable
DeclaredService
Taxable
DeclaredService
Taxable
DeclaredService
DeclaredService
Taxable
Taxable
DeclaredService
Taxable
Nottaxable
2.Constructionofacomplex,building,civilstructureorapartthereof
DeclaredService
1.Servicesprovidedbybuildersor
developersoranyotherperson,
wherebuildingcomplexesoffered
forsale&Paymentreceived
beforeissueofcompletion
Certificate
2.BOTAgreements
3..Transferoflanddevelopment
rights
4.Constructionservicebysocietyto
members
5.transfersinterestintheflat
etc.,toabuyerafterpaying
someinstallments,
NegativeList
1..Consturctionby
GovernmentforNonbusiness
entities
ExemptionList
1)anairport,portorrailways,
includingmonorailormetro;
2)asingleresidentialunit
otherwisethanasapartofa
residentialcomplex;
3)lowcosthousesuptoacarpet
areaof60squaremetresper
houseinahousingproject
approvedbycompetentauthority
4)postharveststorage
infrastructureforagricultural
produceincludingacoldstorages
forsuchpurposes;
ExemptionList
5.mechanizedfoodgrainhandling
system,machineryorequipmentfor
unitsprocessingagriculturalproduceas
foodstuffexcludingalcoholicbeverages
6..Road,bridge,tunnel,orterminalfor
roadtransportationforusebygeneral
public;
7.Acivilstructureoranyotheroriginal
workspertainingtoaschemeunder
JawaharlalNehruNationalUrban
RenewalMissionorRajivAwaasYojana;
8.)Abuildingownedbyanentity
registeredundersection12AAofthe
IncometaxAct,1961andmeant
predominantlyforreligioususeby
generalpublic;
9.)Apollutioncontroloreffluent
treatmentplant,exceptlocatedasa
partofafactory;or
10.astructuremeantforfuneral,burial
orcremationofdeceased;
11.ConstructionforGovernmentbyService
provider
3..Temporarytransferorpermittingtheuseorenjoymentofanyintellectualpropertyright
DeclaredService
NegativeList
ExemptionList
1Permanenttransferofintellectual
propertyright.Forexample.Saleof
copyrightforconsideration.
2.Temporarytransferuseofcopy
rightofmusicartworkandcertain
computerprogrammes
1.Temporarytransferof
Copyright,Patents,Trademarks,
Designs,Anyothersimilarright
CaseStudies
Description
musiccompanyhavingthecopyrightofmusicsound
recordingtransfersitsrighttemporarilyofdistributing
music
Acomposerofasonghavingthecopyrightforhisown
song.Heallowstherecordingofthesongonpaymentof
someroyaltybyamusiccompanyforfurtherdistribution
Mr.Rajanauthor,havingcopyrightofanIndirecttax
book.HereceivedroyaltyfromtheM/sCHpublishersfor
publishingthebookwrittenbyhim
M/SRRMoviemakershavingacopyrightofa
cinematographicfilm
Natureofservice
Declaredservice.
fallsunderSec13(1)(c)of
Copyright
Exemptionlistfallsunder
Sec13(1)(a)ofCopyright
Taxability
Taxable
Exemptionlist fallsunder
Sec13(1)(a)ofCopyright
Nottaxable
Exemptionlist fallsunder
Sec13(1)(b)ofCopyright
Nottaxable
Nottaxable
.4.Development,design,programming,customization,adaptation,upgradation,
enhancement,implementationofinformationtechnologysoftware
DeclaredService
1Onsitedevelopmentof
software
2Advice,consultancyand
assistanceonmattersrelatingto
informationtechnology(Cover
underdefinitionofservice)
3..Deliveryofcontentonlinefor
consideration
4.Alicensetousesoftwarewhich
doesnotinvolvethetransferof
'righttouse'wouldneitherbea
transferoftitleingoodsnora
deemedsaleofgoods(Cover
underdefinitionofservice).
softwareisdevelopedfora
particularcustomerneed
ExemptionList
NegativeList
1.Servicesof
Governmentfor
Nonbusiness
entities
1.Prepackagedorcannedsoftwarewhichisput
onamedialikeCDetcisinthenatureofgoods
Notaserviceitisexcludedfromdefinition.
Agreeingtotheobligationtorefrainfromanact,ortotolerateanactorasituation,ortodoanact
DeclaredService
NegativeList
ExemptionList
DeclaredService
1.i.Agreeingtotheobligationto
refrainfromanact.
ii.Agreeingtotheobligationto
tolerateanactorasituation.
iii.Agreeingtotheobligationto
doanact.
Iv.NonCompetingagreements
NIL
NIL
Transferofgoodsbywayofhiring,leasing,licensingoranysuchmannerwithouttransferofrighttouse
suchgoods
DeclaredService
NegativeList
1.Transferofgoodsbywayof
hiring,leasing,licensingorany
suchmannerwithouttransfer
ofrighttousesuchgoods
S.No. Natureoftransaction
1.
2.
3.
4.
5.
NIL
ExemptionList
NIL
Whethertransactioninvolvestransferof
righttouse
Taxability
Taxable
Acarisgiveninhirebyapersontoacompany
Righttouseisnottransferred.Theserviceis,
alongwithadriveronpaymentofchargesonper
thereforecoveredinthedeclaredlistentry.
month/mileagebasis
Taxable
Supply of equipment like excavators, wheel Thetransactionwillnotinvolvetransferof
loaders, dump trucks, cranes, etc for use in a righttousesuchequipmentasintermsofthe
particular project where the person to whom agreementthepossessionandeffective
such equipment is supplied is subject to such controloversuchequipmenthasnotbeen
terms and conditions in the contract relating to transferredeventhoughthecustodymay
the manner of use of such equipment return of havebeentransferredalongwithpermission
such equipment after a specified time, tousesuchequipment..
maintenanceandupkeepofsuchequipment.
Hiringofbanklockers
Thetransactiondoesnotinvolvetherightto Taxable
usegoodsaspossessionofthelockersisnot
transferredtothehirer).
HiringoutofvehicleswhereitisThe
Notransferofrighttousegoodsaseffective Taxable
responsibilityoftheownertoabidebyallthe
controlandpossessionisnottransferred
lawsrelatingtomotorvehicles
(AllahabadHighCourtjudgementinAhuja
GoodsAgencyv.StateofUP
[(1997)106STC540]refers)
Hiringofaudiovisualequipmentwhereriskisof Notransferofrighttousegoodsaseffective Taxable
theowner
controlandpossessionisnottransferred
.Activitiesinrelationtodeliveryofgoodsonhirepurchaseoranysystemofpaymentby
installments
DeclaredService
NegativeList
interestorotherchargeslike
leasemanagementfee,
processingfee,documentation
chargesandadministrativefees
etc.,InHP,Leasetransactions
NIL
ExemptionList
NIL
Transferofgoodsbywayofhiring,leasing,licensingoranysuchmannerwithouttransferofrighttouse
suchgoods
NotCoveredunder
NegativeList
Servicedefinition
DeclaredService
1.Transferofgoodsbywayof
hiring,leasing,licensingorany
suchmannerwithouttransfer
ofrighttousesuchgoods
1NIL.
1.Deemedsaleslike,deliveryofgoodson
hirepurchase/ofpaymentbyinstallments/
Hirechargesarenotliableforservicetax
2.Deemedsaleslikedeliveryofgoodson
financialandcapitalleases.Leaserental
arenotliableforservicetax
3.When'operatinglease'haselementsof
transferof'righttouse'
Serviceportioninanactivitywhereingoods,beingfoodoranyotherarticleofhumanconsumptionor
anydrink(whetherornotintoxicating)issuppliedinanymanneraspartoftheactivity
DeclaredService
1.Supplyoffoodordrinksina
restaurant;
2.Supplyoffoodsanddrinksby
anoutdoorcaterer
Condition:
outdoorcatererandrestaurants
havingairconditioningorcentral
heatingsystem
NegativeList
NotCoveredunder
Servicedefinition
1.DeemedsalesLikesaleoffood/drinks
NIL.
ExemptedList
ServicePortionofgoodanddrinksof
Outdoorcatererandrestaurantshavingair
conditioningorcentralheatingsystem
DeclaredService
Serviceportioninexecutionofaworkscontract
NegativeList
Contractsforrepairormaintenanceof
motorvehicles
Contractsforconstructionofapipelineor
conduit
Contractsforerectioncommissioningor
installationofplant,machinery,equipment
orstructures,whetherprefabricatedor
otherwise
C
ontractsforpaintingofabuilding,repairofa
building,renovationofabuilding,walltiling,
flooring
NIL
ExemptionList
NIL
ExemptedServices1
Educationalservicesfrom11.07.2014
ServicesprovidedBYaneducationalinstitutiontostudents,facultyandstaff
Servicesprovidedtoaneducationalinstitutioninrespectofeducationexemptedfromservicetax,
Educationalinstitutionmeansaninstitutionwhereservicesprovidedinthenegativelistspecified.
SNo
Service
provider
Service
receiver
Transaction
Taxability
Educational
institution
Students,
facultyand
staff
(a)ConsiderationfromServicesauxiliaryeducationservicesfrom
(a)to(e)above
(b)Considerationfromrentingofimmovableproperty
Exempt
Anyperson
Educational
institution
Considerationfrom
(i)transportationofstudents,facultyandstaff;
(ii)catering,includinganymiddaymealsschemesponsored
bytheGovernment;
(iii)securityorcleaningorhousekeepingservicesperformedin
sucheducationalinstitution;
(iv)servicesrelatingtoadmissionto,orconductofexamination
by,suchinstitution
Exempt
Rentingofimmovablepropertyservicereceivedbyeducationalinstitutionsisnowtaxable
NewExemptedservices
Servicesprovidedbycommonbiomedicalwastetreatmentfacilityoperatorstoclinical
establishmentsexemptedfrom11.07.2014.
(IRDAapprovedlifemicroinsuranceschemeswithsumassurednotexceedingRs.50,000exempted
from11.07.2014.
Loading,unloading,packing,storageorwarehousing,transportbyvessel,railorroad(GTA),of
cottonginnedorbaledexemptedfrom11.07.2014.
ServicesreceivedbyRBIfromoutsideIndiainrelationtomanagementof foreignexchangereserves
from11.07.2014.
ServicesprovidedbyIndiantouroperatorstoforeigntouristsinrelationtoatourwhollyconducted
outsideIndiaexempted
ExemptedServices1
Charitableactivities
NoExemption
ExemptedListService
Servicesofadvancementofanyotherobjectof
ServicesofCharitabletrust
Rgisteredundersec12AAofIT
generalpublicutilityaboveRs.25lakh
AdvocateorArbitralTribunals'Services
Coverageofexemption
I.Serviceproviderisarbitraltribunal
SNo Servicereceiverwhois
Taxability
1
anypersonotherthanabusinessentity
Exempt
businessentitywithaturnoveruptorupeestenlakhin
2
Exempt
theprecedingfinancialyear;
business entity with a turnover exceeding rupees ten
3
Noexemption.Taxable
lakhintheprecedingfinancialyear;
II.ServiceProviderwhoisofIndividualadvocate/Firmofadvocates
Taxability
1
Individualadvocate/Firmofadvocates
Exempt
2
anypersonotherthanabusinessentity
Exempt
businessentitywithaturnoveruptorupeestenlakhin
3
Exempt
theprecedingfinancialyear;
business entity with a turnover exceeding rupees ten
4
Noexemption.Taxable
lakhintheprecedingfinancialyear;
II.Serviceproviderisofpersonrepresentingarbitraltribunal
Taxability
1
arbitraltribunal
Exempt
Educationalservices
Sno
1
Serviceprovider
Servicereceiver
Exempted educational Anyperson
institute(where
educational service is
exempted)
Anyperson
Transaction
Taxability
a)
Consideration
from Taxable
auxiliary education services
from(a)to(e)above
(b)Consideration from renting
ofimmovableproperty
Exempted
a)
Consideration
from Exempt
educational
auxiliary education services
institute(where
from(a)to(e)above
educational service (b)Consideration from renting
isexempted)
ofimmovableproperty
ExemptedServices2
Servicesprovidedtoarecognizedsportsbody
S
Serviceprovider
no
1 individualasaplayer,referee,
umpire, coach or team
manager
2 recognisedsportsbody
3
individuals such as selectors,

commentators,
curators,
technicalexperts
individualasaplayer,referee,
umpire, coach or team
manager
Service
receiver
recognised
sportsbody
recognised
sportsbody
recognised
sportsbody
IPL
Transaction
Taxability
Participation in a sporting Exempt

event organized by a
recognizedsportsbody
Anyservice
Exempt
participation in a sporting Taxable
event organized by a
recognizedsportsbody
participation in a sporting Taxable
event
ConstructionServicesServicesprovidedtotheGovernmentorlocalauthority
Service
Anyperson
Provider
Service
Government,Localauthority,Governmentalbody
receiver
Natureof
construction, erection, commissioning, installation, completion, fitting out, repair,
service
maintenance,renovation,oralterationofthedescriptionof(a)to(f)below
Taxability
Serviceisexempt.
Services provided to the Government, a local authority or a governmental authority by way of
construction,erection,commissioning,installation,completion,fittingout,repair,maintenance,
renovation,oralterationof
a) acivilstructureoranyotheroriginalworksmeantpredominantlyforuseotherthanfor
commerce,industry,oranyotherbusinessorprofession;
b) a historical monument, archaeological site or remains of national importance,
archaeological excavation, or antiquity specified under the Ancient Monuments and
ArchaeologicalSitesandRemainsAct,1958(24of1958);
c) astructuremeantpredominantlyforuseas
(i) aneducational,
(ii) aclinical,or
(iii) anartorculturalestablishment;
d) canal,damorotherirrigationworks;
e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage
treatmentordisposal;or
f) aresidentialcomplexpredominantlymeantforselfuseortheuseoftheiremployeesor
MPs.,,MLAs.,Membersoflocalauthority
ExemptedServices3
SpecifiedConstructionservices
Services provided by way of construction, erection, commissioning, installation, completion,
fittingout,repair,maintenance,renovation,oralterationof,
a) aroad,bridge,tunnel,orterminalforroadtransportationforusebygeneralpublic;
b) a civil structure or any other original works pertaining to a scheme under Jawaharlal
NehruNationalUrbanRenewalMissionorRajivAwaasYojana;
c) a building owned by an entity registered under section 12 AA of the Income tax Act,
1961(43of1961)andmeantpredominantlyforreligioususebygeneralpublic;
d) apollutioncontroloreffluenttreatmentplant,exceptlocatedasapartofafactory;or
e) astructuremeantforfuneral,burialorcremationofdeceased;
Coverage
Service
Anyperson
Provider
Service
Anyperson
receiver
Natureof
construction, erection, commissioning, installation, completion, fitting out, repair,
service
maintenance,renovation,oralterationofthedescriptionof(a)to(e)above
Taxability
Serviceisexempt.
ConstructionServicesOriginalworksOthers
ScopeofExemptService
Services by way of construction, erection, commissioning, or installation of original works
pertainingto,
a) anairport,portorrailways,includingmonorailormetro;
b) asingleresidentialunitotherwisethanasapartofaresidentialcomplex;
c) lowcosthousesuptoacarpetareaof60squaremetresperhouseinahousingproject
approvedbycompetentauthorityempoweredunderthe'SchemeofAffordableHousing
in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation,
GovernmentofIndia;
d) postharveststorageinfrastructureforagriculturalproduceincludingacoldstoragesfor
suchpurposes;or
e) mechanized food grain handling system, machinery or equipment for units processing
agriculturalproduceasfoodstuffexcludingalcoholicbeverages;
Service
Provider
Service
receiver
Natureof
service
Taxability
Anyperson
Anyperson
construction,erection,commissioning,orinstallationoforiginalworks
ofthedescriptionof(a)to(e)above
Serviceisexempt.
Rentingofahotel,inn,guesthouse,club,campsiteorothercommercialplaces
Service
Rentingofahotel,inn,guesthouse,club,campsiteorothercommercialplaces
meantforresidentialorlodgingpurposes
Exemption Whendeclaredtariff<=Rs.1000/
Servingoffoodorbeveragesbyarestaurant,eatingjointoramess
Serviceprovider
Restaurant,eatingjointoramess,
Service
Taxability
Exemptionnot
available(Taxable)
Servingoffoodorbeverages
serviceisexempt
(i)Restaurant,eatingjointoramesshasthefacilityofairconditioningor
centralairheatinginanypartoftheestablishment,atanytimeduringthe
yearand
(ii)Restaurant,eatingjointoramesshasalicencetoservealcoholic
beverages.BothACandNonACTaxable.
ExemptionforFactorycanteenhavingACwef22.10.2013
Servicesprovided,inrelationtoservingoffoodorbeverages,byacanteenhavebeenexempted
fromservicetaxprovidedsuchcanteen:
ismaintainedinafactorycoveredundertheFactoriesAct,1948,and
(ii)hasthefacilityofairconditioningorcentralairheatingatanytimeduringtheyear.
ClarificationonissuespertainingtorestaurantserviceCBEC,videCircularNo.173/8/2013
STdated07.10.2013
A:Servicesprovided(inrelationtoservingoffoodorbeverages)byairconditionedaswell
asnonairconditionedrestaurants,eatingjointsormess,operatinginacomplex
Inacomplex,airconditionedaswellasnonairconditionedrestaurantsareoperational.These
restaurantsareclearlydemarcatedandseparatelynamed,butfoodissourcedfromacommon
kitchen.
Insuchacase,servicesprovidedinrelationtoservingoffood/beveragesrestauranthavingthe
facilityofairconditioningorcentralairheatinginanypartoftheestablishment,atanytime
duringtheyearisliabletoservicetax.However,suchservicesprovidedinanonairconditioned
ornoncentrallyairheatedrestaurantwillbetreatedasexemptedserviceandthus,willnotbe
liabletoservicetax.
B.Servicesareprovidedbyaspecifiedrestaurantinotherarease.g.swimmingpoolor
anopenareaattachedtotherestaurant
Servicesprovidedbyrestauranthavingthefacilityofairconditioningorcentralair
heatinginanypartoftheestablishment,atanytimeduringtheyear,inotherareasof
thehotelareliabletoservicetax.
C.ServicetaxongoodssoldonMRPbasisacrossthecounteraspartoftheBill/invoice
IfgoodsaresoldonMRPbasis(fixedundertheLegalMetrologyAct),theyhavetobe
excludedfromtotalamountforthedeterminationofvalueofserviceportion.
Goodstransportagency
Serviceprovider
Service
Transportationofgoodsfruits,vegetables,eggs,milk,foodgrainsorpulses
Taxability
Serviceisexempt.
Coverage2.
Serviceprovider
Service
Transportationofanygoods
Valuebased
grossamountchargedsinglegoodscarriage<=Rs.1500/
exemption
grossamountchargedfor allgoodsofsingleconsignee<=Rs.750/
RentingofMotorVehiclefortransportationofpassengersandgoods
ScopeofExemptService
Servicesbywayofgivingonhire
a) to a state transport undertaking, a motor vehicle meant to carry more than twelve
passengers;or
b) toagoodstransportagency,ameansoftransportationofgoods
Transportofpassengers
ServiceProvider
Service
Transport
through
Taxability
Anyperson
Transportationofpassengers withorwithoutbelongings
ByairfromandtoNortheasternstates,BagdograofWestBengal
ContractcarriageExcludingtourism,conductedtour,charterorhire
ropeway,cablecaroraerialtramway
Serviceexempt
MotorvehicleparkingtogeneralpublicExemptionwithdrawnnowtaxablefrom
01.04.2013
Service
Taxability
Coverage2
Service
Taxability
vehicleparkingtogeneralpublic
Serviceistaxable
Leasingoflandforprovidingparkingfacility
Serviceistaxable.
Servicebyaclub/association/societytoownmembers
Coverage1:
ServiceProvider
Service
Taxability
Coverage2:
ServiceProvider
Service
Taxability
Coverage3:
ServiceProvider
Service
Taxability
Registeredtradeunion
Toitsownmembersbywayofreimbursementofchargesorshareof
contribution
Exempt
Registeredunincorporatedbodyoranonprofitentity
contribution,fortheprovisionofcarryingoutanyactivitywhichisexempt
fromthelevyofservicetax
Exempt
Registeredunincorporatedbodyoranonprofitentity
contributionprovidedbyResidentwelfareAssociation.
ExemptuptoanamountofRs.5000/ permonthpermemberforsourcing
ofgoodsorservicesfromathirdpersonforthecommonuseofits
membersinahousingsocietyoraresidentialcomplex
ClassificationonClarificationregardingexemptionavailabletoservicesprovidedbya
ResidentWelfareAssociation(RWA)toitsownmembersCBECvideCircular
No.175/01/2014STdated10.01.2014,hasclarifiedthesedoubtsasfollows:
S. Doubt
No
Clarification
1. (i) In a residential complex, monthly

contribution collected from members is used
by the RWA for the purpose of making
payments to
thethirdparties,inrespectofcommonlyused
servicesorgoods
[Example: for providing security service for
the residential complex, maintenance or
upkeep of common area and common
facilities like lift, water sump, health and
fitness centre, swimming pool, payment of
electricity Bill for the common area and lift,
etc.].
Isservicetaxleviableonthesame?
(ii)Ifthecontributionofamember(s)of
aRWAexceeds
`5,000permonth,howshouldthe
servicetaxliabilitybecalculated?
2. (i)IsSmallServiceProviders(SSP)exemption
underNotificationNo.33/2012STavailableto
RWA?
(ii)Doesaggregatevalueforthepurposeof
threshold exemption, include the value of
exemptservice?
3. If a RWA provides certain services such as

payment of electricity or water bill issued by
third person, in the name of its members,
acting as a pure agent of its members, is
exclusion from value of taxable service
available for the purposes of SSP exemption
or exemption provided under mega
exemptionnotification?
Exemptioninmegaexemptionnotificationisprovided
specifically with reference to service provided by an
unincorporated body or a nonprofit entity
registered
under any law for the time being in force such as
RWAs,toitsownmembers.
However, a monetary ceiling has been prescribed for
thisexemption,calculatedintheformof`5,000per
month per member contribution to the RWA, for
sourcingofgoodsorservicesfromthirdpersonforthe
commonuseofitsmembers.
Ifpermonthpermembercontributionofanyorsome
membersofaRWAexceeds
`5,000,entirecontributionofsuch
members whose per month contribution exceeds `
5,000wouldbeineligiblefortheexemptionunderthe
saidnotification.Servicetaxwouldthenbeleviableon
theaggregateamountofmonthlycontributionofsuch
members.
SSPexemptionunderNotificationNo.
33/2012ST is applicable to a RWA, subject to
conditionsprescribedinthenotification.
Under this notification, taxable services of aggregate
value not exceeding ` 10 lakh in any financial year is
exemptedfromservicetax.Asperthedefinitionof
aggregatevalueprovidedinexplanation
of the notification, aggregate value does not include
the value of services which are exempt from service
tax.
InRule5(2)oftheServiceTax(DeterminationofValue)
Rules,2006,itisprovidedthatexpenditureorcosts
incurred by a service provider as a pure agent of the
recipient of service shall be excluded from the
valueoftaxableservice,subjecttotheconditions
specifiedinthesaidrule.
Forexample,wherethepaymentforanelectricitybill
raisedbyanelectricity
transmission or distribution utility in the name of the
owner of an apartment in respect of electricity
consumed thereon, is collected and paid by the RWA
to the utility, without charging any commission or a
considerationbyanyothername,theRWAisactingas
apureagentandhenceexclusionfromthevalue
oftaxableservicewouldbeavailable.However,inthe
case of electricity bills issued in the name of RWA, in
respect of electricity consumed for common use of
lifts,motorpumpsforwatersupply,lightsincommon
area,etc.,sincethereisnoagentinvolvedin
4. IsCENVATcreditavailabletoRWA
forpaymentofservicetax?
RWA may avail CENVAT credit and use the same for
payment of service tax, in accordance with the
CENVATCreditRules,2004.
servicesprovidedbypersonlocatedinanontaxableterritory
Serviceprovider
Person located in Nontaxable
territory
territory
territory
Servicereceiver
Government, a local authority, a
governmentalauthority
Individual receiving service for personal
purpose
PersonlocatedinNontaxableterritory
Taxability
Exempt
Exempt
Exempt
Health Care services

Coverage (Exempted and not taxable)
Health care Services rendered by doctors, hospitals, clinics, sanatoriums, paramedics, labs
for diagnosis, treatment for illness, injury, deformity, abnormality and pregnancy.
Plastic/Cosmetic Surgery when undertaken to restore or to reconstruct anatomy or

functions of body affected due to congenital defects, developmental abnormalities, injury
or trauma
Not covered (taxable)

Healthcareservicesofhairtransplantorcosmeticorplasticsurgery
Renting of precincts of a religious place or conduct of any religious ceremony

Scope of Exempt Service
Services by a person by way of-
Renting of precincts of a religious place meant for general public; or conduct of any religious
ceremony
Clarificationastowhetheragriculturalproduceincludesriceandbenefitsavailableinrespectof
riceundermegaexemptionnotification
CBEC vide Circular No.177/03/2014 ST dated 17.02.2014, has clarified that the definition paddy
includerice,whevereverexemptionavailabletopaddyalsoavailabletorice.
Exempted Services 4
Training or coaching in recreational activities

Scope of Exempt Service
Services by way of training or coaching in recreational activities relating to arts, culture or

sports.
Coverage
a) Services by way of training or coaching.
b) Coaching should be in recreational activities (Activity of entertainment, enjoyment, refreshment).
c)
Such coaching relating to arts, culture or sports.
Copyright
Coverage:
Service Provider
Any person
Service receiver
Any person
Nature of
service
Temporary transfer or permitting the use or enjoyment of a copyright

(a)original literary, dramatic, musical, artistic works or cinematograph
films or (b)cinematograph films
Taxability
Service is exempt
Services by a performing artist in folk or classical art forms

S No
Service provider
Service
receiver
Service
Taxability
Artist of folk music, folk dance and

folk theatre
Any person
Performance in folk music, folk

dance/Folk theatre
Exempt
Artist of Classical music, Classical

dance and Classical theatre
Any person
Performance in Classical music,

Classical dance/ Classical theatre
Exempt
Above (1) and (2) as a brand

ambassador
Any person
Performance in above(1) and (2)
Taxable
Artist of Western music, mimicry,

modern theatre, magic shows
Any person
Performance
Taxable
Artists of cinema, television
Any person
Performance
Taxable
Artists of Painting, sculpture
Any person
Performance
Taxable
Someotherexemptedservicesforexamination
ServicesprovidedbyNSDCorbyanapprovedSSC/assessmentagency/trainingpartnerexempted
Servicesprovidedby:
(i)theNationalSkillDevelopmentCorporation(NSDC)setupbytheGovernmentof
India;
(ii) aSectorSkillCouncil(SSC)approvedbytheNSDC;
(iii) anassessmentagencyapprovedbytheSSCortheNSDC;(iv) atraining
partnerapprovedbytheNSDCortheSSC
inrelationto:
(a)theNationalSkillDevelopmentProgrammeimplementedbytheNSDC;or
(b)a vocational skill development course under the National Skill Certification and
MonetaryRewardScheme;or
(c)anyotherSchemeimplementedbytheNSDC
havebeenexemptedfromservicetax.
Services provided by cord blood banks by way of preservation of stem cellsexempted
Services provided by cord blood banks by way of preservation of stem cells or any other service in
relationtosuchpreservationhavebeenexemptedfromservicetax.[NotificationNo.04/2014STdated
17.02.2014]
(d)Loading/unloading/packing/storage/warehousingofriceexempted
Servicesbywayofloading,unloading,packing,storageorwarehousingofricehavebeenexemptedfrom
servicetax.[NotificationNo.04/2014STdated17.02.2014]
(e)ScopeofdefinitionofGovernmentalauthoritywidened
ThedefinitionofGovernmentalauthorityhasbeensubstitutedwiththefollowingnewdefinition:
Governmentalauthoritymeansanauthorityoraboardoranyotherbody;(i)
setup
byanActofParliamentoraStateLegislature;or
(ii) establishedbyGovernment,
with90%ormoreparticipationbywayofequityorcontrol,tocarryoutanyfunctionentrustedtoa
municipalityunderarticle243WoftheConstitution.
Thus, the scope of the definition has been enhanced.Henceforth, an authority or aboardorany
otherbodyestablishedbyGovernmentwith90%ormoreparticipationbywayofequityorcontrolneed
notbesetupunderanActofParliamentoraStateLegislaturetoqualifyasGovernmentalauthority.
[NotificationNo.02/2014STdated30.01.2014]
(f) Expansioninthescopeofexemptionofservicesprovidedbywayofsponsorshipofsportsevents
Hitherto,servicesprovidedbywayofsponsorship ofsportingeventsorganizedbyanational sports
federation, or its affiliated federations were exempt from service taxwheretheparticipatingteams
orindividualsrepresentanydistrict,Stateorzone.Thesaidexemptionhasbeenextendedeveninacase
wheretheparticipatingteamsorindividualsrepresentanyCOUNTRY.
NegativelistofServices
ServicesbyGovernmentoralocalauthority
NotCoveredinNegativeList
Service(Taxableservices
NegativeListService
1.ServicesofGovernment
2.PostalDepartmentServices
(a)postalservicessuchaspostcard,inland
letter,bookpost,registeredpost,Order
Money
(b)Servicesofsavingsaccounts,PostalOrders,
Pensionpayments
1.PostalDepartmentServices
(a)postalservicessuchasSpeedpost,Insurance
services,,AgencyServicestoOtherthan
government
(b)SupportservicesofGovernment
Servicesbywayofeducation
NegativeListService
Coverageunderthisentry(Nottaxable)
Serviceofpreschools
Serviceofhighersecondaryschool(mayormaynotberecognised)
ServicesofPostschooleducationasapartofcurriculumforobtaininga
qualificationrecognizedbylaw.Servicesofcolleges/universitiesofacademic,
Technical,medical,managementwherethecertificatesissuedwere
recognisedbyIndianlawwillbecoveredunderthisentry.Coachingclasses
conductedbyICAI,ICWAIandICSIalsocoveredunderthisentry.
ServicesofinstitutessuchasITIconductedbyapprovedvocational
educationalcourseunderapprenticeactsuchasfitter,turner,dressmaker,
boilerattendant,painter,carpenteretc.,
ServicesofinstituteswhichoffertrainingforModularEmployableSkill
CourseapprovedbyNCVTsuchasAutomotiverepairs,banking,electronic
etc.,
Servicesofinstituteswhichoffertraininginpromotionofskilland
excellencewhichisaffiliatedtoNSDC
Someotherservicesofeducationalinstitutionsnotcoveredunderthis
entry,areexemptedsuchasauxiliaryeducationalservicesetc,.Fordetails
referchapterexemptedservices.
Services of private coaching

institutes. as such training does
not lead to grant of a recognized
qualification.
Privatetutorship.
Servicesbywayofrentingofresidentialdwellingforuseasresidence
NegativeListService
Servicesbywayofrentingofresidentialdwelling
foruseasresidence
Accommodationinhotel,motel,inn,guest
house,campsite,lodge,houseboat,orlike
placesmeantfortemporarystaywhere
declaredtariff>Rs.1000/
FinancialSector
NegativeListService
Servicecharges,process
charges,admincharges,
documentationchargeson
loans,deposits
Interest,discounton
loans,advances
Incomeonsale/purchase
ofForeignexchange
amongbanks,FI
Incomeonsale/purchaseof
ForeignexchangetoGeneral
public
Serviceoftransportationofpassengers NotCoveredinNegativeList
NegativeListService
i.astagecarriage;(Publictransport)
Iirailwaysinaclassotherthan
afirstclass;or
banairconditionedcoach;
Iiimetro,monorailortramway;
Ivinlandwaterways;
v.publictransportinavesseloflessthanfifteen
tonnenet,otherthanpredominantlyfortourism
purpose;and
Vimeteredcabs,radiotaxisorautorickshaws;
a)Tourismservicebytour
operator
b)Transportofpassenger
throughaircraftotherthanup
anddowntoNortheastern
states.
c)Transportofpassengersby
vesselfifteentonormore
d)Transportofpassengersby
bullockcart,cyclerickshaw,
animalssuchascamelsetc.,
(e)Travelsotherthanmetercab,
calltaxis
Servicesbywayoftransportationofgoods
NegativeListService
a)Byroadexcepttheservicesofa(a)goodstransportation
agency;or(b)acourieragency;
b)ByanaircraftoravesselfromaplaceoutsideIndiato
thefirstcustomsstationoflandinginIndia;
c)Byinlandwaterways
TransportationofgoodsbyGoodstransportagency,
courieragency.CertainservicesareGoodstransport
agencywasexempted.Fordetailsreferservicetax
exemptions.
Transportofgoodsinanaircraftoravesselwithin
India.
Expresscargoservicewhereforspeedytransportation
andtimelydeliveryofsuchgoodsorarticles
Negative list of Services

Services relating to agriculture
Services relating to agriculture by way of :
a)
agricultural operations directly related to production of any agricultural produce including cultivation,
harvesting, threshing, plant protection or testing;
b)
supply of farm labour;
c)
processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning,
trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which
do not alter essential characteristics of agricultural produce but make it only marketable for the primary market;
d)
renting or leasing of agro machinery or vacant land with or without a structure incidental to its use ;
e)
loading, unloading, packing, storage or warehousing of agricultural produce;
f)
agricultural extension services;
g)
services by any Agricultural Produce Marketing Committee or Board or
h)
Services provided by a commission agent for sale or purchase of agricultural produce.
All the above services from (a) to (h) in relating to agriculture are covered in the negative list and they are not liable
for service tax.
The benefits available to agricultural produce in the negative list for paddy [Section 66D(d)] are
not available to rice. Circular No.177/03/2014 ST dated 17.02.2014
However certain other services relating to rice like GTA, packing and job work will continue to exempt
under exempted services
Selling of space for advertisements in print media
Selling of space for advertisements in print media is only cover under negative list
S e r v i c e t a x p a y a b l e to other segments like online and mobile advertising,
advertisements on internet websites, out-of-home media, on film screen in
theatres, bill boards, conveyances, buildings, cell phones, automated teller
machines, commercial publications, aerial advertising, etc.
Service of ad agencies is taxable. Commission received by ad agents is taxable. Canvas

of ads is also taxable
NegativelistofServices
entertainmenteventsandaccesstoamusementfacilities
NegativeListService
Entrytoentertainmentevents
Accesstoamusement
facilities
Standalone ride set up
in a mall
Entry to video parlors
exhibiting movies
played on a DVD player
and displayed througha
TVscreen
Culturalprogramme,
dramaoraballetheldin
anopengarden
Membershipofaclub/
Auxiliaryservicesfor
organizingan
entertainmentevent
Serviceoftransportationofpassengers
NegativeListService
i.astagecarriage;(Publictransport)
Iirailwaysinaclassotherthan
afirstclass;or
banairconditionedcoach;
Iiimetro,monorailortramway;
Ivinlandwaterways;
v.publictransportinavesseloflessthanfifteen
tonnenet,otherthanpredominantlyfortourism
purpose;and
Vimeteredcabs,radiotaxisorautorickshaws;
a)Tourismservicebytour
operator
b)Transportofpassenger
throughaircraftotherthanup
anddowntoNortheastern
states.
c)Transportofpassengersby
vesselfifteentonormore
d)Transportofpassengersby
bullockcart,cyclerickshaw,
animalssuchascamelsetc.,
(e)Travelsotherthanmetercab,
calltaxis
Servicesbywayoftransportationofgoods
NegativeListService
a)Byroadexcepttheservicesofa(a)goodstransportation
agency;or(b)acourieragency;
b)ByanaircraftoravesselfromaplaceoutsideIndiato
thefirstcustomsstationoflandinginIndia;
c)Byinlandwaterways
TransportationofgoodsbyGoodstransportagency,
courieragency.CertainservicesareGoodstransport
agencywasexempted.Fordetailsreferservicetax
exemptions.
Transportofgoodsinanaircraftoravesselwithin
India.
Expresscargoservicewhereforspeedytransportation
andtimelydeliveryofsuchgoodsorarticles
Placeofprovisionrulesatglance
Serviceistaxableonlywhenitisrenderedintaxableterritory.Whethertheserviceisrenderedin
taxableterritoryornotistobedeterminedasperPlaceofprovisionrulesasbelow.
Rule
Applicability
Place of
provision
ofservice
shallbe
locationoftherecipientofservice
3
Generalrule/
HiringofmeansoftransportlikeAircraftsandVessels
yachtsmorethanonemonth(From01.10.2014)
4
Incasewhereservicesareprovidedinrespectof
goodsthatarerequiredtobemadephysically
availabletotheserviceprovider
Example:
Repair,reconditioning,oranyotherworkongoods(not
amountingtomanufacture),storageandwarehousing,
courierservice,drycleaning
Incaseofserviceswhichrequirethephysical
presenceofthereceiverorthepersonactingon
behalfofthereceiver,withserviceprovider
Example:Cosmeticsurgerybeauticianservices,class
roomteaching,fitnessservices
location where the servicesareactually

performed
Exception:
ifgoodsaretemporarilyimportedtoIndia
forservice,forrepairsandareexported
aftertherepairswithoutbeingputtoany
useinthetaxable territory
ieRule4notapplicable.Rule3applicable
In case of services provided directly in relation toan

immovableproperty
Ex:Construction,realestateagent,renting,survey,land
propertymanagement,
In case of services provided by way of admission to,
or organization of, a cultural, artistic, sporting,
scientific, educational, or entertainment event, or a
celebration, conference, fair, exhibition, or similar
events,andofservicesancillarytosuchadmission.
Ex: Musical programmers, exhibitions, road show,
fashionshow
Whereanyservicereferredtoin rules4, 5, or 6 is
providedatmorethanonelocation,includinga
locationinthetaxableterritory
Place where the immovable property is

locatedorintendedtobelocated.
Where the location of the service provider well as

thatofservicereceiverisinthetaxableterritory
Ex:ServiceperformedoutsideIndiaondeputationwhere
bothservicereceiverandserviceproviderisindia.
locationoftherecipientofservice
Theplacewheretheeventisactuallyheld.
location in the taxable territory where the

greatest proportionoftheserviceisprovided
location of the serviceprovider

Incaseof
(a)Services provided by a banking company, or a
financial institution, or a nonbanking financial
company,toaccountholders;
(b)Online information and database access or retrieval
services;
(c)Intermediaryservices;
(d) Service consisting of hiring of means of
transportofyachtsup to a period of one month.From
01.10.2014
10
Theplaceofprovisionofservicesoftransportationof
goods,otherthanbywayofmailorcourier
theplaceofprovisionofservicesofgoodstransportation
agency
placeofdestinationofthegoods
thelocationofthepersonliabletopaytax.
11
Inrespectofapassengertransportationservice
placewherethepassengerembarksonthe
conveyanceforacontinuousjourney
12
Incaseofservicesprovidedonboardaconveyance the first scheduled point of departure of

during the course of a passenger transport operation, thatconveyanceforthejourney
including services intended to be wholly or
substantiallyconsumedwhileonboard
13
In orderto preventdoubletaxationor nontaxationof the provisionof a service,orfor the uniform

application of rules, the Central Government shall have the power to notify any description of
service or circumstances in which the place of provision shall be the place of effective use and
enjoymentofaservice.
Notwithstandinganythingstatedinanyrule,wheretheprovisionofaserviceis,primafacie,determinable
intermsofmorethanonerule,itshallbedeterminedinaccordancewiththerulethatoccurslateramong
therulesthatmeritequalconsideration.
14
DeterminationoflocationofserviceProvider/ServiceReceiver.Rule2(h)(i)
Thelocationofservicereceiverwillbedeterminedasbelow:
A. Wheretheserviceprovider/servicereceiverhasobtaineda The premises for which such
singleregistration,whethercentralizedorotherwise,
registrationhasbeenobtained
B (i)Where the service provider/service receiver is not The location of his business
coveredunderpointA.above
establishment
(ii) Where the services are provided from/used at a Thelocationofsuchestablishment

placeother thanthebusinessestablishment,thatis to
say,afixedestablishmentelsewhere,
(iii) Where services are provided from/used at more Theestablishmentmostdirectly

than one establishment, whetherbusinessorfixed
concernedwiththeprovision/use
oftheservice;
(iv)Intheabsenceofsuchplaces(i,ii&iii)
Theusualplaceofresidenceofthe
serviceprovider/servicereceiver.
Reverse Charge
The following table provides a combination of service provider and service receiver where the reverse charge of
service tax is applicable. Any other combination of service provider or service receiver, if the service is not exempted
or not covered in service list, the service tax is payable by service provider. For example, in the case of a goods
transport agency, if the service receiver is an individual, the service tax is payable by the service provider goods
transport agency.
1. Services of insurance agent

S. No
Particulars
Particulars
Service provider
Insurance Agent
Service Receiver
Insurance Company/Any other person
Service tax liability

of service provider
NIL

of service receiver
100%
2. Services of Goods Transport Agency (GTA)

S. No
Particulars
Particulars
Service provider
GTA
Service Receiver
Consignor or consignee who is (a) factory, society, registered dealer of excisable

goods, body corporate, partnership firm, AOP and (b) who pays or is liable to pay
freight either himself or through his agent for transportation of such goods in goods
carriage.
S. No
Particulars
Particulars

of service provider
NIL

of service receiver
100%
Explanation
The person who pays or is liable to pay freight for the transportation of goods by
road in goods carriage, located in the taxable territory shall be treated as the person
who receives the service for the purpose of this notification. i.e., If such a person is
located in a non-taxable territory, the provider of service shall be liable to pay
service tax.
3. Sponsorship service
S. No
Particulars
Particulars
Service provider
Any person
Service Receiver
Anybody corporate or partnership firm located in the taxable territory

of service provider
NIL

of service receiver
100%
4. Services of Arbitral tribunal

S. No
Particulars
Particulars
Service provider
Arbitral tribunal
Service Receiver
Business entity

of service provider
NIL

of service receiver
100%
5. Services of Legal Services of Advocate or Advocate Firms

S. No
Particulars
Particulars
Service provider
Individual Advocate/Advocate firm
Service Receiver
Business entity turnover more than Rs.10 lakh during previous financial year

of service provider
NIL

of service receiver
100%
6. Services of director to company/Body Corporate

S. No
Particulars
Particulars
Service provider
Director
Service Receiver
Company/Body Corporate

of service provider
NIL

of service receiver
100%
7. Support Services by Government or Local Authority excluding renting of immovable property and
Postal, port, airport and railway services
S. No
Particulars
Particulars
Service Provider
Government or Local Authority
Service Receiver
Business entity located in taxable territory

of service provider
NIL

of service receiver
100%
8. Service of Renting or hiring of motor vehicle designed to carry passengers to any person who is not
in the similar line of business
S. No
Particulars
Particulars
Service provider
Individual, HUF, Proprietor, partnership firm, AOP located in taxable territory.
Service Receiver
Business entity registered as body corporate located in the taxable territory

of service provider
NIL in case of abated value,

50% in case of Non abated value

of service receiver
100 % in case of abated value,

50% in case of Non abated value
8 A Service of Recovery Agent from 11.07.2014

S. No
Particulars
Particulars
Service provider
Recovery
Service Receiver
Banking Company/Financial Institution

of service provider
NIL

of service receiver
100 %
9 Services received from non-taxable territory (Import of Service)

S. No
Particulars
Particulars
Service provider
Person located in Nontaxable territory
Service Receiver
Person located in Taxable territory

of service provider
NIL

of service receiver
100%
Partial Reverse Charge

10. Services of Supply of Manpower or security service for any purpose
S. No
Particulars
Particulars
Service provider
Service Receiver
Business entity of a registered body corporate located in taxable territory
4.83

of service provider
25%

of service receiver
75%
11. Service portion in execution of Works Contract

S. No
Particulars
Particulars
Service provider
Service Receiver
Business entity of a registered body corporate located in taxable territory

of service provider
50%

of service receiver
50%
Explanation
In works contract services, where both service provider and service recipient is the
person liable to pay tax, the service recipient has the option of choosing the
valuation method as per choice, independent of valuation method adopted by the
provider of service.
Service tax Abatements
S.
No.
Nature of Service
Abatement Taxable
Allowed
Value
Conditions for non

Availment of cenvat
credit
Services in relation to financial leasing including hire

purchase
The gross amount charged for this service will be sum total
of the following 10% of the amount forming or representing interest;
and
Other charges such as lease management fees,
processing fees, documentation charges and
administrative fees.
90%
10%
NIL
Transport of goods by rail
70%
30%
NIL
Transport of passengers, with or without accompanied

belongings by rail
70%
30%
NIL
Bundled service by way of supply of food or any other

article of human consumption or any drink, in a premises
(including hotel, convention center, club, pandal, shamiana
or any other place, specially arranged for organizing a
function) together with renting of such premises
30%
70%
Goods classifiable
under chapter 1 to 22
of the Central Excise
Tariff Act
Transport of passengers by air, with or without

accompanied belongings
60%
40%
Inputs, capital goods
Renting of hotels, inns, guest houses, clubs, campsites or

other commercial places meant for residential or lodging
purposes
40%
60%
Inputs, capital goods
Services of goods transport agency in relation to

transportation of goods
75%
25%
Inputs, capital goods,

input service not
taken by Service
Provider
S.
No.
Nature of Service
Abatement Taxable
Allowed
Value
Conditions for non

Availment of cenvat
credit
Services provided in relation to chit
30%
70%

input service
Renting of any motor cab vehicle designed to carry

passengers not more than six excluding driver
60%
40%
No CC on Inputs,
capital goods,/But
CC on input service
for renting motor can
be availed (1.10.2014)
9A
Renting of any vehicle other than motor cab designed to

carry passengers from 1.10.2014
60%
40%
CC on Inputs, capital
goods, input service
10
Transport of goods in a vessel 01.10.2014
50%
60%
50%
40%

input service
11
Services by a tour operator in relation to:

(i) a package tour
Condition:
The bill issued for this purpose indicates that it is
inclusive of charges for such a tour.
75%
25%

input service
(ii) a tour, if the tour operator is providing services solely of

arranging or booking accommodation for any person
Conditions:
(i) The invoice, bill or challan issued indicates that it is
towards the charges for such accommodation.
(ii) This exemption shall not apply in such cases where
the invoice, bill or challan issued by the tour operator,
in relation to a tour, only includes the service charges
for arranging or booking accommodation for any
person and does not include the cost of such
accommodation.
60%
40%
No CC Inputs, capital
goods,
But CC input service
for the service paid to
other tour operated
can be taken
01.10.2014
(iii) services other than those specified in (i) and (ii) above
90%
10%

input service
12
Construction of a complex, building, civil structure or a

part thereof, intended for a sale to a buyer, wholly or partly
except where entire consideration is received after issuance
of completion certificate by the competent authority.
Condition:
The value of land is included in the amount charged from
the service recipient.
Inputs
S.
No.
Nature of Service
(a)
(b)
for residential unit having carpet area upto 2000

square feet or where the amount charged is less than
rupees one crore;
for others
Abatement Taxable
Allowed
Value
75%
25%
70%
30%
Conditions for non

Availment of cenvat
credit
1.Explanation to the above Notification of abatements

Determination of gross amount:
In respect ofService of (Supply of food, pandal, convention together with renting of premises mentioned
atserial No 4), the value should be as below
Particulars
Amount
Total of the gross amount charged
xxxxxxx
Add: the fair market value of all goods and services supplied whether or
not under Same contract
xxxxxxx
xxxxxxx
Less:the amount charged for such goods or services supplied to the

service provider, if any
xxxxxxx
Less: the value added tax or sales tax, if any, levied thereon
xxxxxxx
Gross amount charged
xxxxxxx
Determination of gross amount:

In respect of Service of construction of complex at serial No 12, the value should be as below
Particulars
Amount
Total of the gross amount charged
xxxxxxx
Add: the fair market value of all goods and services supplied to
therecipient(s)in/inrelation to the service,whether or not under Same
contract
xxxxxxx
Less:the amount charged for such goods or services supplied to the service
provider, if any
xxxxxxx
Less: the value added tax or sales tax, if any, levied thereon
xxxxxxx
Gross amount charged
xxxxxxx
ServicetaxValuation
Section 67(1)
Situation
Value
(i)Wheretotalconsiderationis
monetaryconsideration
TaxableValue=GrossamountchargedexclusiveofST
(ii)Whereconsiderationiswhollyin
kind[nonmonetaryconsideration]
ServiceTax(DeterminationofValue)Rules,2006,Rule3(a):
TaxableValue=Grossamountchargedbyserviceproviderforsimilar
serviceprovidedtothirdparty
IfvaluecannotbedeterminedasabovethenTaxableValue=Monetary
equivalentofnonmonetaryconsideration
Whereconsiderationispartlyinkind
[nonmonetaryconsideration]
ServiceTax(DeterminationofValue)Rules,2006,Rule3(b):
TaxableValue=[MonetaryConsideration+MarketValueofNon
monetaryConsideration](butitshallnotbelessthanthecostof
provisioningofservice)
Whereconsiderationisnot
quantifiable
TaxableValue=ValuedeterminedinprescribedmannerNomannerhas
beenprescribedsofarbutitispracticallybestjudgmentassessment
Sec67(2)
STnotcollected/notchargedValuetocalculatebackwards
Sec67(3)
Grossamountincludespartpayment/advancepaymentreceived/suspenseaccount
Rule4
RejectionofValuebyCEO:Ifassesseedoesnotdeterminevalueaspersec67andSVRhecan
rejectvalue,issueSCN,giveopportunityanddeterminevalue
Rule5
Inclusionsofcertainexpenses/Reimbursementofexpensesnotincludibleinvalueifactasa
pureagent.
Rule2AValuationincaseofworkscontract
This valuation rule is the subject the provisions of section 67 with regard to
valuation.
Thevalueincaseofworkscontractis:
GrossamountchargedexcludingVatontransferofproperty Xxxx
ongoods
Less:Valueoftransferofpropertyingoodsinvolvedin
executionofcontract
Xxxx
Valueofworkscontract service
Xxxx
Exclusionsinthegrossamountcharged
VAT/sales tax paid on transfer of property in goods involvedinexecutionofcontract
Inclusionsinthegrossamountcharged
Labourchargesforexecutionoftheworks;
Amountpaidtoasubcontractorforlabourandservices;
Chargesforplanning,designingandarchitectsfees;
Charges for obtaining on hire or otherwise, machinery and tools used for the
executionoftheworkscontract;
Cost of consumables such as water, electricity, fuel, used in the execution of the
workscontract;
Costofestablishmentofthecontractorrelatabletosupplyoflabourandservices;
Othersimilarexpensesrelatabletosupplyoflabourandservices;and
Profitearnedbytheserviceproviderrelatabletosupplyoflabourandservices.
Valueoftransferofpropertyingoodsinvolvedinexecutionofcontract
TurnoveradoptedforlocalstatevatlawscanbeconsideredasValueoftransferof
propertyingoods
Whenthevalueofgoodsinvolvedintheworkscontractisnotascertainableornotavailable,
thevaluecanbedeterminedontheslabratesystemasbelow:
Whereworkscontractisfor...
(A)executionoforiginalworks
Valueoftheserviceportionshallbe...
40%ofthetotalamountchargedforthe
workscontract
(B)maintenanceorrepairorreconditioningorrestorationor 70%ofthetotalamountchargedforthe
servicingofanygoods&
workscontract
(C)incaseofotherworkscontracts,notincludedinserialnos. Witheffectfrom01.10.2014
above,includingcontractsformaintenance,repair,
completionandfinishingservicessuchasglazing,plastering,
floorandwalltiling,installationofelectricalfittings.
Totalamountmeans
S.No. Particulars
1
2
3
4
5
AMOUNT(inRs.)
Grossamountreceivedexcludingtaxes
xxxxxxxxx
Fairmarketvalueofgoodssuppliedbytheservicereceiverexcludingtaxesxxxxxxxxx
Amountchargedbyservicereceiverfor2
xxxxxxxxx
Totalamountcharged(1+23)
xxxxxxxxx
Valueofserviceportion(40%of4incaseoforiginalworks)
xxxxxxxxx
Rule2BDeterminationofvaluewithregardtomoneychanging
Incase
Valueoftaxableservice
(i)
Currencyisexchanged
from,orto,IndianRupees(INR)
Difference in Buying rate/selling rate andRBIreferencerateforthat

currencyatthattime*Totalunitsofcurrency
*
WheretheRBIreferencerateforacurrencyisnotavailable,the
valueshallbe1%ofthegrossamountofIndianRupeesprovidedorreceived,
bythepersonchangingthemoney
(ii)
Neitherofthecurrencies
exchangedisIndianRupee
1%ofthelesserofthetwoamountsthepersonchangingthemoneywould
havereceivedbyconvertinganyofthetwocurrenciesintoIndianRupeeon
thatdayatthereferencerateprovidedbyRBI
Rule2CDeterminationofvalueoftaxableserviceinvolvedinsupplyoffoodanddrinksinarestaurantor
asoutdoorcatering.
Sl.
Description
ValuePercentageoftotal
No.
amount
1.
Serviceinvolvedinthesupplyoffoodoranyotherarticleofhuman
consumptionoranydrinkatarestaurant
2.
Serviceinvolvedinthesupplyoffoodoranyotherarticleofhuman
consumptionoranydrinkasoutdoorcateringservice
Totalamountmeans
Particulars
Totalofthegrossamountcharged
Add:thefairmarketvalueofallgoodsandservicessuppliedwhetheror
notunderSamecontract
Less:theamountchargedforsuchgoodsorservicessuppliedtothe
serviceprovider,ifany
Less:thevalueaddedtaxorsalestax,ifany,leviedthereon
Grossamountcharged
40
60
Amount
xxxxxxx
xxxxxxx
xxxxxxx
xxxxxxx
xxxxxxx
xxxxxxx
Pointoftaxationrules
Note: Individuals, partnership firms this POT rules not applicable when previous FY aggregate taxable
servicesis<=50L(detailsreferSTrule6)
Rule 3 Point of taxation in normal cases
Rule
Event
Point of taxation
3(a)
If Invoice is issued within 30 days of completion of service
Date/Time of invoice
3(a) proviso If Invoice not issued within

service
3(b)
30 days of completion of Date of completion of service
If any payment is received (including advance) before the Date of receipt of payment.
date of completion of service or date of invoice.
(POT will be up to the extent of
payment received)
Examples
Case Date
completion
service
of Date of invoice Date on which Point of Taxation

of
payment
received
Remarks
Invoice issued with 30 days

April
1st
2014
April
30th
2014
May2nd 2014
April
30th
2014
April 1st 2014
May 1std 2014
August 20, 2013

May2nd 2014
April 1st 2014
Invoice not issued with 30 days
April 1st 2014
April 20th 2014
April 16th 2014
April 16th 2014
4
April
20tht
2014
April
30th
2014
Payment received after the date

of completion of service and
before date of invoice.
Part
payment April 10th 2014 to Payment received before the
date of Completion of service
received
on the extent of
Part payment.
April 10th 2014
Determinationofpointoftaxationincaseofcontinuoussupplyofservice
Sameasaboveexcept,invoiceistoberaisedfromthedateofcompletionofanevent
MeaningofDateofpayment
Normalcases
Date of entry in books or date of crediting in bank account,

Whicheverearlier.
SpecialcasesincaseofChangeineffectiverateoftax
(a)
Rate changes between entry in Paymentiscreditedwithin4daysfromtheeffectivedateof

booksandcreditedinbankaccount newratedateofentryinthebooksisthedateofpayment
Otherwise,dateofCreditinginthebankaccountisthedateof
payment
(b)
New service brought in to service Sameasabove

tax between entry in books and
creditedinbankaccount
Rule4Determinationofpointoftaxationincaseofchangeineffectiverateoftax(CERT)
Dateofprovisionofservice
Dateofissueofinvoice
Dateofreceiptofpayment
AnytwoBeforechangeinrateOldrate
AnytwoafterchangeinrateNewrate
Rule5Pointoftaxincasesofnewservices(Newservicebroughtundertaxnet)
Rule
Event
Pointof
taxation
5(a) Invoiceissuedandpaymentreceivedbeforeservicebecametaxable
Noservicetax
(b) Paymentreceivedbeforeservicebecametaxableandinvoiceissuedafterservicebecame Noservicetax

taxablewithin14days)
Rule7DeterminationofpointoftaxationincaseofspecifiedservicesorpersonsunderReverseCharge
otherthanthecasesofRule5pointoftaxincaseofnewservices
Rule
Event
Pointoftaxation
Receipt of service & Payment made in advance or within 3 months Dateofpayment

fromthedateofinvoiceofserviceproviderWEF1.10.2014
proviso Payment not made in advance or within 3 months from the date of Date immediately following
invoiceofserviceproviderforinvoicesissuedfrom01.10.2014
theperiodof3months
Rule
10
Receiptofservice,Paymentnotmadewithin3monthsfromthedate As per Rule 3, 4, or 8, as the

ofinvoiceofserviceproviderforinvoiceissuedbefore01.10.2014
casemaybe
ServicereceivedfromassociatedenterprisewhenserviceproviderislocatedoutsideIndia
Rule7
Event
Pointoftaxation
Second
proviso
Providing
service
of DateofcreditinbooksofaccountofpersonreceivingserviceorDateofmaking
paymentwhicheverisearlier
Rule8IntellectualPropertyService(copyright,trademark,designorpatent),whereconsiderationnot
ascertainableatthetimeofservice
Rule
8
Event
Providing
service
Pointoftaxation
of ReceiptofpaymentbyserviceproviderorDateofInvoiceissuedbyserviceprovider
whicheverisearlier
Note:IftheconsiderationisascertainableatthetimeofserviceRule3isapplicable
Rule8ADeterminationofpointoftaxationinothercasesBestofjudgmentrule
POTcannotbedeterminedaspertheserules
Dateofinvoiceorthedateofpaymentorbotharenotavailable,
CEO,requiretheconcernedpersontoproducesuchaccounts,documentsorotherevidenceas
hemaydeemnecessary
Aftertakingintoaccountsuchmaterialandtheeffectiverateoftaxprevalentatdifferentpoints
oftime,shall,byanorderinwriting,
after giving an opportunity of being heard, determine the point of taxation to the best of his
judgment
Servicetaxprocedures1
ServicetaxRegistration
4(1)
Rule4ofST
rules1994
CAN.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
rajdhost@yahoo.com
4(!A)
4(2),4
(3)
&3(A)
4(4)
4(5)
4(5A)
4(6)
4(7)
PersonsRequireRegistration:
SP,ISDandSRwithin30daysofservicebecomestaxable/
commencementofbusiness
SSPwithin30daysofservicecrossing30lakhs
Documentsrequiredforregistration:
SelfattestedPAN,&CBECwillnotifydocumentsrequiredfor
registration
Premisestoberegistered:
1.OnePremises:oneservice/multipleservice:Oneregistration
2.Morethanonepremises:oneservice/multipleservice:
(a)Centralizationofbilling:OneregistrationforCentralizedpremises
(b)Decentralizationofbilling:Multipleregistrationforeachpremises
GrantofRC:Scrutinyofapplication,Rcwithin7daysbyAC/DC.
Ifnotgrantedwithin7daysRCisdeemedtohavebeengranted
IntimationofchangetoCEOAnychangeinRC,additionalinformation
if any, shall be intimated to the AC/DC, within 30 days (For example
addresschange/provisionofnewservice)
Transferofbusiness:thetransfereeshallobtainafreshcertificate
ofregistration
Surrender/
Cancellation
ofRC
Ceasestoprovide
taxableservice
Intimate
Paytaxdues,filesreturnsandapplyfor
cancellation,surrenderoriginalRC.
STPayment
6(1)
1.Individual,Proprietaryfirm,
partnershipQTYpayment
2.OthersMonthlypayment.
Duedatesforpayment
Duedate:5thoffollowingmonthofqtr/month
Lastqtr/marchMarch31st
Epaymentinsteadof5thitis6th
Rule6(1)
Proviso
6(1A)
CAN.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
rajdhost@yahoo.c
om
6(2)(2
A)
Individuals/Firms
cashbasis
OptionalforCentralisedreg.STassessee.Pay
athisowncalculation.
Intimatewithin15daysaboutpaymentand
adjustmentinsubsequentperiod.
Advance
payment
Procedurefor
payment
6(3)
CreditofST
6(4)
Provisional
payment
1.PaymentthroughGAR7Challan
2Epaymentmandatoryforallassesses
3.Dateofpresentationofchequedateof
payment
STinvoiceissued/paymentreceivedalongwith
ST,butServicenotprovidedCreditforSTcan
betaken
Condition:refundamount/issuecreditnote
Rule6(1A)to
Rule7(c)
6(4A)
&4(B)
6(4C)
6(5)&
6(6)
Self
adjustment
ofexcessST
paid
PreviousFYAggregateTaxableservices
<=50lakhs,currentFYuptoRs.50
lakhsSTpaymentonreceiptbasis
Assesseeunableestimatethevalueonthedate
ofdeposit,requestAC/DCforP.A.
AC/DCallowPA.SameasExcisePAexceptBond.
Excessoftheamountofservicetaxforamonth
orquarteradjustinnextmonthwithoutanylimit,
Excesspaymentforreasonslikeinterpretationof
law,taxability,valuationorapplicabilityofany
exemptionnotificationcannotbeadjusted.Only
refund
SelfadjustmentofexcessST
paid
Incaseofrentingof
immovableproperty
MemorandumofST
formST3A
Ifpropertytaxesrevises,assesse
canadjustexcessSTpaidand
intimatewithin15days
AssesseeshouldfileST3Aincase
ofPA.AC/DCcompleteFAafter
callinginformationifany.
CAN.RajasekharFCA,DISA(ICAI)Chennai
9444019860,rajdhost@yahoo.com
6(7)to
6(7C)
OptionalratesincaseofAir
travelLTAgentFEdealer,
Onceoptionexercise
theycannotwithdraw
sameinFY
Rule4A&4B
Recordsunder
ST(Invoice)
4A
Provi
so
Proviso
&4B
Proviso
Proviso
Rule5
Timingofinvoice
Additionalparticulars
GTA
Issue Consignment note with

prescribed particulars, gross weight of
theconsignment.
Timingofinvoicefor
Continuousservice
Within30daysofreceiptofpaymentor
completionofeventofserviceWhich
everisearlier.
Excessamountupto
Rs.1000/realised
InvoiceforsuchexcessuptoRs.1000/
invoiceneednotrise.Paymentasper
POTrules.
Financialrecords
invoice/challanwithin45days&neednot
beseriallynumberedandnameand
addressofpersonreceivingtaxableservice
neednotbecontained
ExceptiontoNBFC
Recordsunder
otherLaws
Recordsunder
ST(Other)
Within30daysofreceiptofpaymentor
completionofserviceWhicheverisearlier.
Invoicewithprescribedparticulars
Listofrecordsin
duplicateto
superintendent
Maintainanedbyassesseewillbeaccepted
Cash/bankbook,Ledger,bankstatementetc.,willbe
accepted
Firsttimewhenfilingreturn.
1.Serviceprovidingrecords
2.Receipt,paymentandprocurementofinputservice
3.Receipt,storage,manufacture,deliveryofinputs/
capitalgoods4.Recordspurchase/sale,
5.Financialrecords
Recordsshouldpreservefor5years
RecordsavailableforinspectiontoCEO
Preservation/
inspection
Rule7
ST3/ST3A
Returnsunder
ST
Halfyearly
Mandatory
Efiling
Revised
ST3
Duedates:October25,April25th,
forISDOctober31,April30
Mandatorylate
feefordelayin
filing
(Exception
GrossST
payableNIL)
RevisedreturnTorectifymistake
within90daysofORfiled
SCNTimelimitfromthedateof
revisedreturn.
DelayUpto15daysRs.500/
From16daysto30daysRs.1000
Beyond30daysRs.1000+Rs.100
perday.MaximumRs.20,000
Interest/PenaltiesunderServicetax
Sec75interestfordelayforpaymentofServicetaxfrom1.10.2014
Extentofdelay
Simpleinterestrateperannum
Upto6months
18%
More than 6 months & up

to 1 year
18% for first 6 months, and 24%for the

period of delaybeyond6months
Morethan1year
18% for first 6 months, 24% for second 6

months, and30%fortheperiodofdelay
Concessionalrateof3%isavailableforassesseewhosereceiptsinpreviousPYislessthan60lakhs
S.No.
Section
NatureofViolation
Penalty
1.
76
FailuretopayServicetax
NotlessthanRs.100perdayofdefaultor1%permonthof
taxwhicheverishigher.Innocasepenaltycanexceedthe
50%oftax.
2.
77(1)(a)
Failuretogetregistration
Rs.10,000 or Rs.200 per day from the first day after due
date, whichever is higher.date till the day of actual
compliance.
3.
77(1)(b)
Failuretomaintainbooksof MaximumRs.10,000
accounts.
4.
77(1)(c)
Failure
to
furnish Rs.5,000 or Rs.200 per day whichever is higher from the
information called by firstdayafterduedatetillthedayofactualcompliance.
CentralExciseOfficer
5.
77(1)(c)
Failuretoappearbeforethe Rs.5,000 or Rs.200 per day whichever is higher from the

Central Excise Officer when firstdayafterduedatetillthedayofactualcompliance.
issued with a summon for
appearance
to
give
evidence or to produce
document.
6.
77(1)(d)
Fails to pay tax through e MaximumRs.10,000

payment
7.
77(1)(e)
Issue invoice with incorrect MaximumRs.10,000

details, fails to account
invoiceinbooks
8.
77(2)
Contraventionoflaw
Where no penalty
mentioned
9.
78(1)
MaximumRs.10,000
is
SuppressionofValue(fraud Equal to the amount of tax. Penalty is reduced to 50%

cases)
servicetaxiftrueandcompletedetailsofthetransactions
areavailableinthespecifiedrecords
Section78A
a
Providing/receivingtaxableservicewithoutissueinvoice
Availsandutilizescreditoftaxesordutywithoutactualreceiptoftaxableserviceor
excisablegoodseitherfullyorpartially
UptoRs.1,00,000/
Maintains false books of account or fails to supply any information/supply false

information
Service tax collected but not paid within 6 months from the due date. This is
cognizable offence when the amount is Rs. 50 lakh or more, the police can
empowered to arrest, investigate without court warrant. It is not non boilable
offence
Section80WaiverofPenalty
No penalty will be levied under sections 76, 77 and 78 A if the assessee proves that there is a
reasonableandsufficientcauseforfailuretocomply.
Central Excise Officer has no power to waive the said 50% penalty for non/short levy or
non/short payment or erroneous refund of service tax by reason of fraud, collusion
etc u/s 78(1). From 06.08.2014
Prosecutionprovisions(CriminalPenalties)Sec89
Category A offences are:
(a)
willful evasion of payment of service tax; or
(b)
availment and utilization of credit of service tax / excise duty without actual receipt of taxable
service / excisable goods either fully or partially in violation of the rules made under the provisions
of Chapter V; or
(c)
maintenance of false books of account or failure to supply any information which a

person is required to supply or knowingly supplying false information.
Category B offence
is collection of any amount as service tax but failure to pay the amount so collected to the credit of the
Central Government beyond a period of six months from the date on which such payment becomes due
[Sub-section (1)].
TermofimprisonmentCategoryAOffence
Ifanypersonisconvictedofanoffenceunderthissectionforthe:
Firsttime
In the case of an offence

wheretheamountis
Termofimprisonment
(i) upto`50lakh
Upto1year
(ii) morethan`50lakh
6monthsto3years
Second and every Irrespectiveoftheamountoftax,Thetermofimprisonmentshallbe6monthsto

subsequenttime
3years
Suchimprisonmentshallbeforatermoflessthansixmonthsiftherearespecialandadequatereasons
toberecordedinthejudgmentoftheCourt.(thisprovisionsameascentralexcise)
TermofimprisonmentCategoryBOffence
Ifanypersonisconvictedofanoffenceunderthissectionforthe:
Firsttime
Second and every

subsequenttime
In the case of an offence

wheretheamountis
Termofimprisonment
(i) upto`50lakh
Upto1year
6monthsto7 years
(i) upto`50lakh
6monthsto3years
6monthsto7 years
Suchimprisonmentshallbeforatermoflessthansixmonthsiftherearespecialandadequatereasons
toberecordedinthejudgmentoftheCourt.(thisprovisionsameascentralexcise)
A person shall not be prosecuted for any offence under this section except with the previous
sanctionoftheChiefCommissionerofCentralExcise.
Sec90:Cognizanceofoffences
Collectsanyamountasservicetaxbutfailstopaybeyondaperiodofsixmonthsfromthedate
on which such payment becomes due, where the amount is exceeding Rs. 50 lakhs shall be
cognizable.Andarrestcanbemadewithoutwarrant.
AllAcategoryoffenceandBCatergorybelowRs,50lakhsisbenoncognizableandbailable
Sec91:PowertoArrest
IftheCommissionerofCentralExcisehasreasontobelievethatanypersonhascommittedan
offencespecifiedsec89(1)wheretheamountisexceedingRs.50lakhshemay,bygeneralor
specialorder,authoriseanyofficerofCentralExcise,notbelowtherankofSuperintendentof
CentralExcise,toarrestsuchperson.
Where a person is arrested for any cognizable offence, every officer authorised to arrest a
personshall,informsuchpersonofthegroundsofarrestandproducehimbeforeamagistrate
withintwentyfourhours.
Inthecaseofanoncognizableandbailableoffence,theAssistantCommissioner,ortheDeputy
Commissioner,asthecasemaybe,shall,forthepurposeofreleasinganarrestedpersononbail
or otherwise, have the same powers and be subject to the same provisions as an officer in
charge of a police station has, and is subject to, under section 436 of the Code of Criminal
Procedure,1973.
AllarrestsunderthissectionshallbecarriedoutinaccordancewiththeprovisionsoftheCode
ofCriminalProcedure,1973relatingtoarrests.
ExciseChargingsection.Sec.3ofCEA
Levy
(fixing
liability)
III
V
VI
Exciseduty
Manufacture/
Productionof
Excisablegoods
inIndia
on
Payas
per
ratesSpecifiedin
Ist&IInd
ScheduleofCETA
EOU,EPZ,STP,
EHTP
Goods
manufactured
byGovt
Collection
Ofduty
byGovt.
II
Pay50%ofBCD+
Exciseduty
also
Excisedutypayable
Administrative
Convenience
(Atthetimeof
removal)asper
are
Excludedexcisablegoods
(NoExciseduty)
Valueisto
bemadeas
per
Customs
valuation
Karya Palak Engineer vs. Rajasthan Taxation Board

2004 AIR (SC).
Manufactureundercentralexcisesec2(f)
Firstpart:
ProcessIncidental/Ancillary
forcompletionofproduct
Manufacture
CE
rules
ExcisableGoods
manufacturedin
SEZ
IV
When
Goodsremoved
toDTA(usein
India)
As
per
Dept.cannot
demandduty
ongoods
storedin
factory/
godown/
warehouse
Nametest/use
testtoapplyto
findoutchange
Outputshouldbe
NewProduct.(Itis
mandatory)
VoluminousJudicial
rulingstodecide
Mfgimplieschange,buteverychangeisnotamanufacture.In
theprocessnewproductshouldemergewithnewname,
Delhiclothmills(SC)
differentuse,differentcharacter,thenonlymanufacture
UjagarPrints(SC)
Parleproducts(SC)
Around78listed.
Secondpart:
Processmentionedin
Emergenceof
Deemed
section/Chapternotesof
NewProductis
Manufacture
Centralexcisetariff
Notrelevant
Deemedmanufacture
conceptupheldin
EmpireIndustries(SC)
SD Fine Chemicals (SC)
Purposeraisingadditionalrevenue
by taxing activities which lead to
substantialvalueaddition
Bodybuildingofvehicles,Audiovideorecordingin
tapes,Galvanizingofironsteel,conversionof
powderintotablets,Refiningofedibleoils
Drawingwirefromrod,. Brandingandlabeling
(Apparels&ClothingAccessories)
PackingfrombulktoSmallercontainers,
labelingorrelabeling,alterationofretailprice
ordoinganyprocessgoodsmaking
marketableforSchIIIofCEA(MRPValuation
goods)
1.ValueadditioninthepackingactivityismandatorytocallasdeemedmanufactureandlevyofED.
2.Ifgoodarealreadymarketable,merepackingandrepackingthemisnotamanufacture.
3.Labeling/relabelingshouldincludedeclarationoralterationofretailsaleprice.merelabelingor
relabelingwillnotbedeemedmanufactureMumbai vs. BOC (I) Ltd. 2008 (226) ELT 323 (SC
IndiaforthepurposeofExciseduty
Land1
Land
Land2
Land3
India
Sea1
Sea
Sea2
DTA(DomesticTariff
Area)
AllStatesandUnion
TerritoriesincludingJ&K
EOU,EHTP,STP,EPZ
Forremovalsto
DTA
SEZ(Excludedarea
Forthepurposeof
India)
Upto200
Nautical
MilesExclusive
EconomicZone
Above200Nautical
MilesHighseaarea
Exciseduty
Liability
Attract
Dutypayable.
Excisedutyliability
donotattract
(Excisedutynot
payable)
Exciseduty
Liability
Attract
(Dutypayable.)
Excisedutyliability
donotattract
(Excisedutynot
payable)
GoodsandExcisablegoods
1.Anyarticle,
material,substance
Goods
Analysis
Definition
Whichit
indicates
GoodsareMovable
Movabilitybyanymodeoftransportfromoneplacetoanother
Movability/transferrability in the same condition. (Without
dismantling and changing shape) MUNICIPAL CORP OF GREATER
MUMBAI- SC
Ropewayerectedforcarryingpassengerintrolleysystemisnotmovable
ExplanationtoSec2(d)
Anyarticle,material,substance
Capableofbeingsoldfor
considerationSuchgoodsdeemed
tobemarketable
Liftcomestoexistenceonlyafteritisinstalledwiththebuilding.
immovable.NotgoodsOtisElevators(SC)
2.Capableof
beingsoldfor
consideration
Whichit
indicates
Actualsaleisnotrelevant
FreesamplesEDpayable
Free replacement /warranty claims ED payable
[BHELSC]Food Specialties Ltd. 1985 (SC).
Even captive consumption can also attract ED Indian Cable Co. Ltd. vs. CCE
1994 (SC).
liability.
Goodsare
Marketable
Marketabilitywillbe
Ordinarilyassuch
Refinedoilgotproducedat
intermediatestage,thatprocessof
deodorizationwasnotcarriednot
CAN.RajasekharFCA,DISA(ICAI)ChennaiTurboalternator saleable after marketableandnotgoods.DCMSC
9444019860,rajdhost@yahoo.com dismantling not as such so,
nonmarketable TRIVENI ENGG &
WORKSLTD.(SC)
1.Specifiedinthe(Ist&
IInd)SchedulestoCETA
ExcisableGoods
Name/Descriptionof
goodsshouldbe
mentionedinanychapter
ofCETA
Definition
Sec2(d)
Specifiedinthe(Ist&IInd)Schedulesto
CETA,
Beingsubjecttoadutyofexcise
andIncludessalt
2.Beingsubjectto
adutyofexcise
Nilrated/0%goodsarealsoexcisablegoods
100%exemptgoodsalsoexcisablegoods
1.goodschargedtoduty
2.goodschargedtoNil/0%
duty
3.goodsChargedtoduty,but
exemptedbynotification
Wallace
flour
mills(SC)
SpecificationinScheduleisnotdeterminativeorconclusiveastomarketability
ItemspecifiedinSchedulebutnotprovedtobemarketablenotexcisable(asmarketabilityisthe
decisivetest)
Conclusion:
Inordertoattractexcisedutyliability,goodsshouldbemovable,marketableandexcisable
Bhorindustriesltd(Sc)
IonexchangeLtd(SC)
IssuesinManufacture
Ex:electronic
goods/Computers
Itisamanufacture
Exciseduty
payable
WhetherAssemblingisaManufactureornot
Yes
Boughtout
Parts/Importedparts
Resulting
NewProduct
Assemblyof
NarneTulamanManufacturersPvt.Ltd.(S.C.).
Assemblyofimportedcomponentsin
toVTR/monitorisMfg.BPL(SC)
No
Assembly
byadealer/
DutypaidgoodsremovedinSemiknocked
buyer
down(SKD)/Completelyknockeddown(CKD)
conditionfortransportconvenience
NotaManufacture
ExcisedutyNot
payable
NotaManufacture
ExcisedutyNot
payable
TICycles(mad)HC
Ex:Cycles,Furnitureetc.,
AssemblyofcomponentsofairconditionerincardoesnotamounttomanufactureCBE&CCircular
dt.1781999.
Sec2curing
WhetherCuringisaManufactureornot
Wilting, drying, fermenting and any
ItisaManufacture&
process
for
rendering
an
Excisedutypayable
unmanufactured product fit for
marketingormanufacture;
Ex:
Coffee
Manufacturersec2(f)
curing
Personwho
manufacturesgoods
Manufacturer
Personwhoemployed
Hiredlabour
Personwho
manufacturesonhis
ownaccount
Mfg.,facility(ownedorhired)+labour+Control,
supervision
Ownershipofmaterial/goodsnotrelevant
Ex;JobworkerisamfgrUjagarPrints(SC)
Personmanufacturesforhimself/orforhisown
consumption,notforuseofanyothers
(Deemedmanufacturer)
.
RMSupplier,brandnameowner,loanlicenseearenotmanufacturer
CibatulLtd.vs.UOI1978(SC)/PhilipsIndiaLtd.vs.UOI(AllHC)FoodSpecialtiesLtd.1985(SC)
1.WiderconceptthanManufacture
Production
2.UsedforGroundproductssuchas
tea,coffee,dairyproducts,ores,
minerals
3.Scrap,byproducts,molasses,pulp
etcproducedduringthecourseof
manufacture
Everymanufactureisaproduction.But
everyproductionneednotbea
manufacture.
Dutyliabilitynotonlyonmanufacturebutalso
onproduction.Goodsproducedduringthe
courseofmanufactureareliableforduty
CAN.RajasekharFCA,DISA(ICAI)Chennai9444019860,rajdhost@yahoo.com
Dutiabilityofsiterelatedactivities/Structures,erections,assemblyatsite
TurnkeyProjects
(Steelplants/Power
Plants/Cement
Plants)
However
Parts/Accessories/
Spares/Components
ofturnkeyprojects
Ifmovableduty
Immovable
Notgoods
Noduty
ImmovableNot
goodsNoduty
Resulting
FinalProduct/
EndProduct
Assembly/erection
atsite
movablegoods
duty
Lifts,Escalators
(OtisElevators)(SC)
Watertreatment
plant(L&T)Noduty
Movablefurniture
assembledatsite
goodsMehta&co
(SC)duty
Permanentlyfixed/attachedtoearth/Wall&
ifitcanbeMovedonlybydismantling
NotgoodsNoduty
Installation/erection
OfMachinery/
Equipment
fixed/attachedtoearth/Wallwithnuts,bolts,
Screwsforadministrationconvenience
goodsduty
KhandelvalmetalMetalEngineering(SC)
IndianAluminumCo(SC)
DutiabilityofWaste/Scrap
Waste/Scrap
Generated/
Produced
From
Manufacture/
Production
Wasteis
Movable
Marketable
Excisable
Yes
No
NoDuty
BanswaraSyntexLtd(Raj)
Prism Cement Ltd. 2008 232
ELT 564 (Delhi Tribunal)
MittalEng/
Hyderabad
raceclub,
Mahinda
(SC)
Solid
Engineering
(SC)2010
Wastegeneratedthrough
buildingdemolition/pipe
cutting/workscontract/
machinerydemolition/
repairingactivity
Noduty,evenifitmovable,
marketableandexcisable
Duty
Payable
DutyliabilityonCaptiveConsumption
FinalProduct
Dutyliable
topay
Ex.Godrejusesfurniture
Inthefactory
CaptiveConsumption
ExceptionCapitalgoods
manufacturedandusedin
factoryformanufacture
offinalproductNoduty
Notification No. 67/95 dated 16-3-1995.
ClearedforHome
consumption
Manufactured
parts,spares/
Components
Dutyliable
topay
Usedforfurther
Manufactureinfactory
WheneverDutypayable
Movability,
Marketability
&
Excisability Should satisfy White
Machines vs. CCEx., Delhi 2008 (224)
ELT347(SC).
Paydutyon
parts,spares/
Components
IfFinalProduct
dutiable
IfFinalProduct
Exemptfrom
duty
And
Availcenvatcredit.UtilisedwhendutypayableonFinal
product
dutyliableonparts,spares/Components
Exceptions**
JKSpinningvs.UOI1987(32)ELT234(SC).
DutyliabilityonIntermediateproducts
Intermediate
Products
(scraps/By
products
etc)
RemovedforHome
Consumption
Usedforfurther
Manufacturein
factory
WheneverDutypayable
Movability, Marketability & Excisability Should satisfy
UnionCarbideIndiaLtd.vs.UOI24ELT169(SC).
Dutyliabletopay
IfFinalProduct
dutiable
IfFinalProduct
Exemptfrom
duty
Paydutyonparts,
spares/Components
Availcenvatcredit.Utilisedwhenduty
payableonFinalproduct
dutyliableonparts,spares/
Components
Exceptions**
Exceptions**NodutyonIp/Sparescomponentsetc.,evenFPisexempt
Finalproductclearedfordeemedexporti.e.,clearedtoEOU,STP/EHTP
FinalproductsclearedtoILO,WHO,UNDP,UNIDO,defense,railways,navyetc.areexemptunderNotification
FinalproductclearedbySSIunderavailingturnoverexemption.However,iffinalproductisfullyexemptunder
anyothernotification,dutywillbepayableonintermediateproduct,oritsvaluewillbeconsideredfor
calculatinglimits
Finalproductisclearedforexportunderbond/paymentofamountof5%aspercenvatcreditrule
Changeinrateofduty&Applicablerateofdutyforpayment
Emergencypowerstoincrease.
Increasesec3ofCETA
CGsatisfyimm.actionneedtoincrease.
Notificationtoissue.
Approvalofparliamentinsessionin15d.
Parliamentpowertomodifynotification.
Nil/exemptedgoodsmaxincrease15%.
OthergoodsdiscretionofCG.
Changeinrates
ofexciseduty
Decreasesec5Aof
CEA
When a Certain goods cover both general and
specificexemption.Theformermaygivemorerelief
to manufacturer. In such a case he can choose the
betteroneHindustanComputerLtd(SC)
CG,Publicinterest,exemptpartlyorfully.
Exemptionmaybeabsolutelyorconditionally.
Conditionsfulfilledmaybebeforeremovalorafterremoval.
Notificationinofficialgazettetopublish.
Whenexemptionisabsoluteavailmentbymanufactureris
mandatory.
ApplicabletoEOUetc.,onlyifmentioned.
Rateofdutyapplicableforpayment/TaxableeventRule5
GoodsRemovedfor
Homeconsumption
Rateofduty
applicablefor
payment
Rateonthedateofremovalfrom
factory
Rateonthedateofremovalfrom
warehouse
Warehousegoods
GoodsUsedfor
Captiveconsumption
Rateonthedateofissueforproduction/
consumption
Molasses
Othercases
Rateonthedateofreceiptofmolasses
infactory
Rateonthedateofremovalfromfactory
RateofdutyincaseprebudgetstockTaxableevent
Excisable
goods
Prebudget
stock
Nonexcisable
goods
Wallaceflourmills(Sc)
1.Nil/Exemptbecomedutiable
Allcases
2.Dutiablebecomeexempt/Nil
Rateonthe
3.Existingratemayincrease/decrease
dateof
removal
Bringinginto
Tarifffirsttime
StockofFGon
28thFeb.
Noduty
VazirSulthanTobbacco(SC)
Mfg.goods
duty
from1stMarch
Dutyliability&dutyRemission(waiver)
DutyLiability
Incase
of
Manufacturedgoods
Rule4
Warehousegoods
Rule20
Ison
Manufacturer
Ison
Warehousekeeper
Ison
MolassesRule4
Buyer/Procurer
OwnershipofgoodsisnotrelevantforpaymentofdutyMoriroku UT India P Ltd (SC)./Hindustan

General Industries (CEGAT) and Mahindra & Mahindra (CEGAT).
Dutypayableevenifisnotchargedorcollectedinsuchcaseitiscumdutyprice(priceinclusiveofduty)
MarutiUdyog(SC)
NaturalLossSec
5ofCEA
DutyRemission
(waiver)
Handling,storage,leakage,
breakage,Process,curing
transit,evaporation,found
deficientinqty.etc.,
NaturalLossorunfitfor
consumptionRule21of
CER
Remissionofdutyonlybeforegoodsremoved
fromfactory,depot,warehosue
NoRemissionofdutyunderanycircumstances
aftergoodsremovedfromfactory,
depot,warehouse
PowersofWaiver
UptoRs.10000/Supdt
UptoRs.1LakhAC/DC
UptoRs.5lakhsJC/addl.C
NaturalLossSame
asabove
Unavoidable
Accident
Remission
Basedon
Industry
norms,
Different
Rates,%s.
Sameasabove
Remission
Basedon
Prooffrom
assessee,
Atthe
discretionof
CEO,subject
toconditions
Damage,spoilage,poor
quality,badworkmanship
Unfitforconsumption
1.ApplicationtoCEOAC/DC
Theftofgoodsislossduetounavoidableaccident.GTCIndustriesLtd.and 2.CEOinspectiontofactory
SialkotIndustrialCorporationvs.UOIDelhiHighCourtHowevercontrary 3.Destroyofunfitgoodsinfrontof
CEO
decisioninCCEvs.InternationalWoollenMills1987(28)ELT310(T)
4.RemissionordergrantbyCEO
ExciseClassification1
Classificationimplies,Groupingandsubgroupingofgoodsundervariouschapterforrateofdutypurpose.
CoverageCETAScheduleIBasicexciseduty&ScheduleIIspecialexciseduty
Classification
Rules(Tobe
followed
Sequentially)
1
2(a)(i)
2(a)(ii)
2(b)
Chapterheadingisonlyforreference.
Classificationtobemadeaspersectionchapternotes.
Unfinished/Semifinished
goods
HavingEssential
Characterfinalproduct
Classifyunderheading
ofFinishedproduct
Unassembled/dis
assembledgoods(SKD/CKD)
Mixturesorcombinationsof
amaterial/substancewith
othermaterial/substance
Classification under same

heading under which that
material/substance
is
classifiable.
Ifgoodsareclassifiableundertwoormoreheadingasperrule2(b)orunderanyotherreason
classifygoodsunderfollowingorder
CAN.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
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3(a)
3(b)
3(c)
PreferSpecificDescriptionratherthangeneralheadiing
Mixtures//compositegoods
consistingofdifferentmaterialsor
madeupofdifferentcomponents//
GoodsPutupinset/Multiutility
articles
Classifyusing
EssentialCharacter
Goodscantbeclassifiedasper(a)&(b)
abovepreferheadingoccurringlastin
thenumericalorder.
GoodsnotclassifiableasperRule1to3(c)above,Classifyunderrule4
Akin
classify under heading appropriate to the
Rule
Rule4
goodstowhichtheyaremostakin/similar.
Rule5
Classificationof Containersspeciallyshapedorfittedtocontaina
Packingmaterial
specificarticleorsetofarticles,
Specificrule Suitableforlongtermuseand
CAN.Rajasekhar
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intended,
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shallbeclassifiedwithsuch
articles
Example
CameracaseClassifyunder
camera
Goldornamentcases=Classify
undergold
Musicalinstrumentboxclassify
undermusicalinstruments
Exception:Ruleisnotapplicablefordurableandreturnable
packing.Ex.Gascylindercannotbeclassifiedundergas
ExciseClassification2
Specificparts
Classification
Of
SpareParts
Partswhichareessential,
Integralpartofgoods
whichareessential,/
Integralpartofmachinery
equipment,vehicles
Subjecttochapter/
sectionnotes
Classifyundernormal
headings/rules
Ex:screws,nuts,bolts,
chainsetc.,
Generalparts
Classifyunder
that
machinery
equipment,
vehicles
Example
Tyresandtubes
Classifyunder
Automobile
Notasrubber
articles.
NonStatutoryClassificationrule
TradeparlanceTheory/CommonMantheoryofclassification
Applicableonlywhenclassificationisnotpossibleunderrule1to5
WordsusedinCETAbutnotdefinedseparately,tobeunderstoodaccordingtothecommon
commercialunderstanding.
Theconsumerbuysanarticlebecauseitperformsaspecificfunctionforhim.Thismental
associationwithaproductishighlyimportantforclassificationAtulGlassIndustries(P.)Ltd.
vs.CCE(1986)(SC).
Classificationhastobemadebasedoncustomeruseandidentityofaproduct.
Example
LalDantManjan(RedToothPowder)cannotbeclassifiedasaMedicine.Itistoothpowder
only.
MineralWatercannotclassifiedasabeverage.
Mirrorcannotbeclassifiedasglassarticle.Itiscosmeticitemonly.
Plastictorchcannotbeclassifiedasplasticarticle.
Windscreencannotbeclassifiedasglassarticle.Itisautomobilepartonly.
Pricklyheatpowdercannotbeclassifiedastoiletrypreparationsandshouldbeclassifiedas
medicines
ValuationMethods
AnnualCapacity
production
Applicableto
PanMasala
ValueonProduction
capacity
Specificduty
Valuation
Valuebasedon
Unitmeasurement
Cigarettelength
MarbleSq.m
SugarQuintal
Crudeoilton
MRPValuation
MRPofPacket
Less%abatement
Isvalue
Transaction
Value
Valuation
rules
SalePrice
Excludinglocal
taxesisvalue
Valueunder
Various
Circumstances
MRPValuation
MeaningofMRP:
Maximumpriceatwhichtheexcisablegoodsinpackagedformmaybesoldtotheultimateconsumer
MRPincludesalltaxeslocalorotherwise,freight,transportcharges,commissionpayabletodealers,andallcharges
towardsadvertisement,delivery,packing,forwarding
Example
Adetergentbar50gramsismanufacturedinPondicherryAndsuppliedtoAndhraPradesh
TotalCost
Rs.6.00
Profit
Rs.1.00
Excise&CST
Rs.0.75
Dealer
Commission
Rs.0.50
Advtetc.
OtherExp
Rs.1.00
A.PVat
Rs.0.75
Total=6.00+1.00+0.75+0.50+1.00+0.75=Rs.10.00==MRPPrintedonSoap
MPPProvisionsalientfeatures
Productshouldcover
bothunderExcise&L
MAct
MorethanoneMRPin
packet
HighestMRPisvalue
AsperLMACTcertain
goods,RP
Printingismandatory
MRPScoredout
toshowsaving,it
isnotrelevant
MRPLessAbatementis
value(Abetment%
notifiedbyCBEC)
Goodsremovedwithout
MRPresulting
Confiscation
+CGdeterminevalue
MRPincreasedafter
Goodsremoved,
IncreasedMRPisvalue
MRPValuationnotapplicableincaseof
GoodssuppliedtoIndustry(exceptcement),soldinbulkwhicharenotforresale,+1,+2freeitems,saletodefense,packlessthan
10g&10ml,packedfooditems
Cartonboxescontaining500SachetsofShampoocannotbeconsideredasMultipiecePackageforretail
sale.MRPValuationnotapplicableKraftechProducts2008(224)ELT504(SC).
MRPValuationapplicableonlyWhendeclarationofMRPisrequiredunderlawMaksonConfectionaryLtd(SC)2010
MRPValuationnotapplicable:Whenicecreamsoldinbulk/
,sellingKitKatchocolatestoPepsi,theseweredistributedasafreegiftalongwithaPepsibottle.JayantiFood
Processing(SC),
WhengoodscoveredinMRP,CVDispayableonImportsonMRPBasic.
WhengoodscoveredinMRP,importedusedforprocess,CVDpayableonTVbasis
Meaning of transaction value

Pricepaid/payable
bybuyer(beforeor
aftersale)
Andincludes
(additions)
Sec4(3)(d)
Otherpaymentsin
Connectionwithsale
Theseitemsincludableonly
Whentheyarepaidbybuyer
Tosellerbyreasonoforin
connectionwithsale
ExcludingLocal
taxes
Advertising
Marketing
Storage
ServicingWarranty
Commission
Excise
Customs
Salestax
Vat
TransactionValuevaluationSec4(1)(a)
Conditions
1.Priceofthegoodssoldatthetimeandplaceofremoval(Sale
anddeliveryattheplaceofremoval)
2.BuyerandSellernotrelatedtoeachother
3.Priceisasoleconsiderationforthesale
when
Placeof
Salehappens
1
PriceofGoods
Soldisvalue
FactoryPlaceof
removal
Removal
atTime&
Placeof
Removal
Example
Sec4(3)(CC)
Sec4(3)(b)
Goodssoldon
30.03.2015at4
Pm,@Rs.140per
unit+taxes+
transport
+Insurance
Timeof
removal
Salecompeteat
factoryFOBPriceat
factoryRs.140is
value
Exp.after
removalnot
relevantforvalue
BuyerandSeller
Notrelatedtoeach
other
Relative
3
.
Priceissole
consideration
1.Priceisforgoods
2.Additionalflowofconsiderationto
addtoarrivevalue
(ReferValuationRuleNo6)
means
means
Factory,depot,warehouse,
agentplaceanyotherplace
wheregoodsareremoved.
ThesameisalsogiveninCCR
2004
Incaseofdepot
TimeofFactory
Priceincreaseafter
removalto150.but
OR
beforedeliveryto
buyer.NoEscalation
clauseinorder.
Buyerpaidonly
Rs.140
suppose
Originalorder
cancelledand
deliverthe
sametoother
buyeratRs.
130.without
gettingback
tofactory.
Rs.140isvalueRs.130/
Rs.150notrelavant
Priceofeach
removalis
Value
means
a.ICUwhichisholdingandsubsidiary
b.Personshaving.MutualInterest
c.RelativeasperScheduleIofCompaniesAct
1SaletoGovt.
2.SaletoIndustrialconsumers
3.Saleinwholesale
4.Saleinretail
Eachpriceisvalueforthatsale
CAN.RajasekharM.Com.,FCADISA(ICAI)Chennai.,9444019860,rajdhost@yahoo.com
InclusionsandExclusionsinValuation
InclusionsinValue
1.Exp.Incurredwithinplaceofremoval
loadingcoolieet
2.Packing(Primary),
2.Secondary,specialPacking,ifgoodsare
removedfromfactoryinthatpackingfor
wholesaletrade.Nationalleather(SC)
3.Salesmancommission
4.Warranty,aftersalesservice.(Optional
extendedwarrantyNotincudableMaruthi
udyog(SC)
5.Inspectionchargesifmandatorybefore
sale
5.Instllation&Erectionincaseofmovable
goodsnotremovedfromfactoryand
installationbringintoexistenceofgoods
(Ex.Movablefurnitureassembledatsite)
6.consultancychargesforManufacturing
7.Design,drawingandEngineeringofgoods
8.HirechargesforD&Rpacking
Sec4(3)(d)ofCEA]
SalePriceforgoodsXXX
+Addl.RecoveriesXXX
Less
SalesTax(XX)
OtherTaxes(XX)
ExciseDuty(XX)
TransactionValueXXXX
Includeallaboveonlyiftheyarenot
includedinprice
ExclusionsinValue
1.Installation&erection
2.Alldiscountsifpasstobuyer.
3Proratecostofdurablepackingifinbuiltin
price
4.NotionalInt.ondeposits.ifnotaffectprice
5.Int.,onreceivables,bankcharges
6.AllLocaltaxes
7.Freight,insurancefromplaceofremovalto
buyerplace.
8.Advt,Salespromotionbybuyeronhisown
9.SubsidyreceivedfromGovernment(from
buyerisincludible)
10.SecuritydepositforD&RPacking
11.Otherchargesifnodiversionofgenuine
price.
Excludeallaboveonlyiftheyareincludedin
price
ExciseValuationRules
ValueunderRulesapplicableonlyWhenany3conditionsofTVisnotfulfilled
Forexample(1.Goodsnotsoldatthetimeandplaceofremoval2.Priceisnotsole
consideration3.Buyerandsellerisrelative)
Valuationwhengoodsarenotsold(Samples/Freewarrantyclaims)Rule4
Coveredunder
MRP
SaleofSamples
(Rule4notapply)
Valueofsamples
Samplesissued
free(Rule4apply)
NotCovered
underMRP
NewProduct
Samples
MRPValuation
Othermethods
Provisional
Assessment/Cost
+10%
Old
Product
Samples
Priceofidentical/
similar
Physiciansampleissuedfreeevenwhicharecovered
Goodssoldatsame
underMRPRule4applybutnotMRPValuation)
time
Isvalue
CAN.RajasekharFCA,DISA(ICAI)
ValuecanbemadeatWholesaleprice/,priceofhighestqtysold
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9444019860,
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IfnotavailablePriceatthenearesttime/
datesubjecttoadjustmentfortimeand
deliveryisvalue
Rule5Valuewhengoodssoldatplaceotherthantheplaceofremoval
(FreeonRoadContract)
Valuewillbecalculatedbydeductingfreightfromplaceofremovaltotheplaceofdelivery
Example1
Factoryat
Chennai
(Placeofremoval
Goods
deliveredto
Buyerplace
AtBangalore
(Placeofdelivery
Inthisexample,NosaleatFactory.Salewillcomplete
atbuyerplace,whenbuyerreceivesand
acknowledgesgoods
If,FORpricefromChennaitoBangaloreisRs.120perunitand freightfromChennaitoBangaloreperunitRs.10,Value
Freightdeductiononactualbasisoraveragebasis(Explanation1)
perunitwillbeRs.110(12010)
Example2
Factoryat
Chennai
(Nota
Placeofremoval)
Depotat
Bhuvaneswar
(Placeofremoval
Goodsdeliveredto
NosaleatFactory.No
SaleatDepot.Sale
completeatbuyerplace
Buyerplace
AtKolkata
(Placeofdelivery inKolkotta.
If,FORpricefromChennaitoKolkataisRs.200perunitand freightfromChennaitoBhuvaneswarisperunitRs.20,
andfreightfromBhuvaneswartoKolkottaisRs.10PerunitValueperunitwillbeRs.190(20010)
NodeductionforfreightfromChennaitobhuvaneswarasChennaiisnotaplaceofplaceofremoval(Explanation2)
Rule6Value,WhenthePriceisnotSoleconsideration
Value=Amountpaidbybuyer+AdditionalConsiderationflownto
seller
Example1
Material,Drawing&
DesignRs.60
NormalSalePrice
Rs.100Perunit
Buyerpaid
the
balance
Rs.40
Suppliedbybuyer
Explanation1
Labour,Overheads,
ProfitRs.40
Valueforexcise=40+60=100
Example2
NormalSalePrice
Rs.100Perunit
Buyerpaidf
Interestfree
deposit/
Advance
payment
Dueto
deposit/
Advance
discount
Rs.20,whichis
notnormalas
perpractice
Buyerpaid
Rs.80
Explanation2
Valueforexcise=80+20=100
Whenthegoodsaresoldatlessthanthemanufacturingcostandifnoadditional
considerationispassedfrombuyertoseller,itisconsideredastransactionvalueNotification
No.20/2014 CE (NT) dated 11.07.2014 ,This amendement makes fiat india case is ineffective.
CAN.RajasekharM.Com.,FCADISA(ICAI)Chennai.,9444019860,rajdhost@yahoo.com
ValuationRuleNo7Valuationincaseofdepotsale(goodstransportedfromfactoryto
depot/Otherplace&soldtobuyerfromthatplaceofremovalgoods
Value:Normaltransactionvalue(priceofHighestqty.,sold)ofdepotonthedateofremovalfromfactory
Example
Factoryat
Chennai
Goodsdispatchedtodepoton04.01.2015
Depotat
Kolkotta
(placeofremoval)
Goodsreachedtodepoton07.01.2015
FactoryPricePerunit
04.01.15Rs.100
07.01.15Rs.110
12.01.15.Rs.120
DepotPricePerunit
04.01.15Rs.130
07.01.15Rs.140
12.01.15.Rs.150
Goodsatdepotultimatelysoldtoconsumer
On12.01.2015atRs.150
AssessablevaluewillbePriceofdepoton04.01.2015.Rs.130
Note:
1.Nodeductionforfreightfromfactorytodepot
2.Freightandinsurancefromdepotonwardsisnotincludibleinvalue.
3.Priceatwhichsuchgoodsaresubsequentlysoldtobuyerfromthedepotisnotrelevantforpurposeofexcise
valuation
ValuationRuleNo8ValuationincaseofCaptiveConsumption
Captiveconsumptionmeansexcisable goods are not sold by the assessee but are used for consumption by him
or on his behalf in the production or manufacture of other articles
Value=Costofproduction+10%or110%ofcostofproduction:
CostofproductionistobecalculatedasperCAS4
CostofproductionasperCAS4
Whenpartofthegoodsare
consumedforcaptive
consumptionandpartaresold,
Partofthegoodsaretovaluedas
perrule8andremainingpart
shouldbevaluedontransaction
value
IgnoreSellinganddistributioncosts
ValuationRuleNo9&10ValuewhenthegoodsaresoldtoRelative
Applicableonly
1.Whenallgoodsorpartofthegoodsaresoldto
Relativepersonorthroughrelativeperson
NotApplicable
1.Whenthepriceatwhichgoodssoldrelative
personatnormalpricewhichissimilartounrelated
person
Value:Priceatwhichtherelatedpersonsellstounrelatedperson.
1
Mfgr
RP
Sale1
URP
Sale2
RP
Mfgr
Sale1
Value=PriceofSale2
RP
Sale2
URP
Value=PriceofSale3
Sale3
WhereRPdoesnotsell(Captivelyconsumes),Valueisasperrule8110%CPOofMfgr.,
ValuationRuleNo10A.Valuationincaseofjobwork
GoodsRemoved
FromJWPlace
Valueincaseof
Jobwork
Goodsreceived
backto
Factoryand
remove
FromFactory
OtherCases
SoldbyPM+deliverytaken
bybuyer+PM,Buyer
unrelated+
Priceissoleconsideration
Priceatwhichthe
PrincipalManufacturer
(RMSupplier)sellthe
goodsisthevalue
GoodsRemoved
FromFactory
PM,Buyerunrelated+
Priceissoleconsideration
Transaction
valueisValue
ValueasperValuationRules
IfgoodsmanufacturedbyJobworkercoveredunderMRP,ValuationwillbeonMRPbasis
notunderJobworkbasis
Whenpartofthegoodsaresoldtorelative/throughICUandpartaresoldto
unrelativeperson,Partofthegoodsaretovaluedasperrule9/10andremainingpart
shouldbevaluedontransactionvalue
ValuationRuleNo11.bestofjudgmentmethod
Applicable
1.Whenallotherrulesnotapplicable
Value:CombinationofTVandallother
ruleswiththeavailableinformation.
CAN.RajasekharFCA,DISA(ICAI)Chennai,9444019860,rajdhost@yahoo.com
ValuationMiscellaneousTopics
Valuationincaseofcomputer
AcerIndia(SC)
Value of preloaded operational software not

includibleinvaluationincaseofcomputer
Not includible even computer cannot function
withoutsoftware.
SoftwareisnotapartofComputer
Computeriscompletewithoutsoftware.CCEVs
AcerIndiaLtd(2004)(SC)172ELT289
ValuationincaseofPurchasedpartsandcomponents
Fittingand
deliveredalong
withproduct
Purchased
Components/Spare
parts
CostincludibleinValuation
(profitnotincludibleinvaluation)
Supplied
Additionally/
separately
Valuationincaseof
Consumables
NotincludibleinValuation
NotincludibleinValuation
(Evenproductcannotfunction)
Purchased
Consumables
Examples:ribbon/cartridge
Gramophonepin,casset
AccessoriesWhichareoptionalnotincludibleinValuation
CumdutyPrice(Priceinclusiveofduty)
WhenthepriceisnotsoleconsiderationandifanyAdditional
Considerationisadded.CBECDOletter334/1/2003dated
28.02.2003
When
CDPisconsidered
IfAssesseeremovesgoodswithoutpaymentofduty(treating
dutiablegoodsasexemptedgoods/notchargedduty),theprice
shouldbetreatedascumdutypriceMaruthiUdyogLtd(2002)(SC)
AvincaseofCDP=CDPx100/100+rateofdutyincl.ec
Alternatively
includeinvalue
andavailcenvat
credit
ValuationApplication/Ordertofollow
Isdutypayablebasedon
Annualcapacityproduction
Yes
Paydutybased
Onannualproduction
No
IstariffvalueorSpecific
dutyapplicable
NotifiedbyGovt.
Yes
Tariffvalue/
Specificduty
Apply
No
IsMRPValuationApplicable&
Goodssold/intendedtosale
Yes
MRPvalueApply
No
Yes
Isthe3conditionsof
Transactionvalue
Satisfied
No
Value as per
Valuation rules
ValueasperTransaction
Value
CenvatCreditBasics
CENVATCreditSystem
CoverageCENVATCreditRules,2004
Rulesprovideintegrationofcentralexciseandservicetax.
Creditcanbetakenbybothmanufacturerandserviceprovider.
Manufacturercantakecreditforpaymentofexcisedutyandservicetax.
Serviceprovidercanalsotakecreditforpaymentofservicetaxandexciseduty.
Creditisavailablefordutypaidoninputs,Capitalgoodsandservicetaxpaidoninputservicesusedfor
manufacturingfinalproduct/providingoutputservices.
Theinputshouldbeusedwithinfactorydirectlyorinrelationtomanufacture.
Noinputcreditisavailableiffinalproduct/outputserviceisexemptfromduty/servicetax.
CENVATCreditRulesdonotrequireinputoutputcorrelationtobeestablished.
Creditisavailableforspecifiedduties.
Creditofexcisedutyand/orservicetaxcanbeavailedonlyonthebasisofdocuments.
Recordsneedtobemaintainedandreturnsneedtobefurnished.
Timingofcredit
Inputs/Capitalgoodsimmediatelyafterreceivingintofactory/premises
Inputserviceimmediatelyafterreceivingthebill
ImpDefinitions
Accountthe
credit
Utilise
Ifdonotuse,Reversalofcredit
Exemptedgoodsmeans:
Excisablegoodswhicharefullyexemptedfromduty;/NILdutygoods
1%dutygoodsaspernotificationNo1/2011ifbenefitavailed&.
Goodsatserialnumbers67and128ofNotificationNo.12/2012&21/2012(Bitumen,fertilisersnot
usedasafertilizer).
Exemptedservicemeans:
NegativelistofServiceswherenoservicetaxpayable;
Taxableserviceswhollyexemptedfromtax;
Taxableserviceswhosepartofvalueisexempted(Abatementapplicableservices)
Exemptedserviceshallnotincludeaservicewhichisexportedintermsofrule6AoftheServiceTax
Rules,1994
Outputservicemeans:
AnyserviceprovidedbyaproviderofservicelocatedinthetaxableterritoryOutputserviceshallnotincludeaservice,
(i)NegativelistofservicesspecifiedinSec66DofFinanceAct1994
(ii)Wherethewholeofservicetaxisliabletobepaidbytherecipientofservice.
:
PlaceofremovalDefintionsameasgivenintransactionvalueSec4
Rule10TransferofCenvatCredit
1.Shiftsfactory/Premises
Transfersunutilised
CenvatCredit
Or
Mfgr/SP
2.Changeofownership
(sale,lease,Merger,Amalgamation,JV)
Cenvatcreditcan
beavailedby
transferee
Condtions
1TransferortransfersInputs,WIP,CGwithspecificprovisionoftransferofliabilities.
2.TransfereeAccountsInputs,WIP&,CGtothesatisfactionofAC/DC
Rule11TransitionalprovisionsofCenvatCredit
11(1)
Closingbalancebefore10.09.2004underoldrulescanbeC/F
Notrelevantnow
Rule11
11(2)
To
11(4)
1.SSIearliernotavailingExemption,decidestoavailexemption
2.Whendutiableproductsbecomesexempted(Sec.5Anotification)
andMfgravailingexemption
3.WhenTaxableServicebecomesexempted(93Anotification)availing
andSPavailingexemption
Payment/ReversalofCenvatCreditavailedoninputs,WIP,FG,Credit
Balanceifanyliesitwilllapseandcannotbeutilizedforanypurpose
Rule12FullCC,ifgoods(inputs,CG)purchasedfromNE,J&K,KutchinGujarat,evendutypartly
exemptedundernotification
Rule13DeemedCreditincaseofinput/Inputservice
CGwillnotifyrate/AmountonCCisavailable..
Actualrate/amountpaidnotrelevant+
CCWronglyavailedorutilized/erroneouslyrefunded
Interestunderexciseandservicetaxapplicable
Rule14RecoveryofCenvatCredit
Interestispayableevenwronglyavailedbutnotutilisedorreversalismade..(Confirmedincircularandin)
.IndSwiftLaboratoriesLtd(SC)
Rule15confiscation/Penalty
Wrongavailment/utilisation
Chennai9444019860,
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Bonafide
mistake
Rulesofnatural
justicetofollow
byCEO(SCN)
Inputs/CGConfiscation&dutyorRs.2000WEH
InputServicetaxorRs.2000WEH
Inputs/CGPenaltySec11AC(equaltoduty,etc.,)
Fraudcases
InputservicePenaltySec78FA94(equaltotax)
CenvatCreditSystemforManufacturer
1.Purchasesfrom
.ManufacturerDepot,
PremisesofConsignment
Agent,FirstStagedealer
SecondStagedealer
Inputs
Excisedutypaid
Capitalgoods
2.Servicefrom
ServiceProvider/
InputServiceDistributor
Service
taxpaid
Final
Product
InputService
CVD
Paid
Inputs
3.Importofgoods
1.Purchases
from
Usedin
manufacture
ofdutiable
final
producut
Exciseduty
Liability=
Duty
payableon
FPminus
Dutypaid
oninputs,
CG&ST
paidon
input
service
CenvatCreditSystemforServiceProvider
Inputs
ManufacturerDepot,
PremisesofConsignment
Agent,FirstStagedealer
SecondStagedealer
2.Servicefrom
ServiceProvider/input
ServiceDistributor
3.Importofgoods
Excisedutypaid
Capitalgoods
Servicetax
paid
Usedin
Providing
taxable
Service
Output
Service
InputService
CVD
Paid
Servicetax
Liability=
STpayableon
TaxableService
minus
STpaidoninput
service&
Dutypaidon
inputs,CG&ST
paidoninput
service
Inputs
QuantumofCredit(AmountofCredit)Available
Amountof
Credit
Available
Inputs/Input
service
Capitalgoods
Full100%of
ED/CVD/ST
SSIorOtherswhereCG
removedinsamefirstYear
AllOthers
Full100%of
ED/CVD
50%inFristYear
Andbalanceinnextyear/years
Example
Basicrawmaterial,
Inputs used as fuel.
Consumables, packing
material, paints, label,
printing,branding
Inputs&CapitalgoodsunderCenvatCredit
Allgoodsused
Infactory
For
Manufacturer
InputInclusions*
1.All goods including
accessories cleared along
with FP where Value
includibleinvaluation.
Inclusions
(Alsoinputs)
(refer*)
Inputmeans
2.Goods
used
for
providing free warranty
claims for final products
(condition:
warranty
valueisincludedinprice)
Exclusions
(Notinputs)
(refer**)
ForService
Provider
InputExclusionsforMfgr&SP**
1.Diesel,Petrol
2.Motorvehicles
3Any.goodsusedinworkscontract,
construction,civilstructureorpart
thereof
4..Anygoodsusedforlayingof
foundationormakingofstructuresfor
supportofcapitalgoods(Except
Forproviding
outputservice
4.CG used as part/

componentinmfg.,ofFP
provision of service portion in the

execution of a works contract or
construction service as listed in declared
services)
AllGoodsOfChapter82,84,
,85,90,6804,6805&their
Components,Spares/
Accessories
CertainMotorvehiclessuch
astractors,cranes
4.Any.goodsareusedprimarilyfor
personaluseorconsumptionofany
employee(usedinguesthouse,club,
quarters,food,clinicetc.,)
Capitalgoods
means
3.All goods used for

generation of electricity
orsteamforcaptiveuse
Allgoodsused
For
Manufacturer
&Service
Provider
PollutionControlEquipment
&theirComponents/Spares
Accessories
Moulds,Dies,Jigs,fixtures,
Refractories,refractory
material
Tubes,Pipes,fittings
thereof
1.Usedinmfg.
offinalproduct
infactory,
2.usedin
outside
factoryfor
generationof
Electricityfor
captiveusein
factory.
3.usedfor
Providing
Outputservice
Storagetank
Equipment,
Applianceusein
office
ForService
Provideronly
Motorvehicles
ofcarryinggoods
MotorvehiclesFor
carryingpassengers
Usedforproviding
outputservice
Forservicesof
(a)Rentingofmotor
vehicle
(b)Transportationofinputs
andcapitalgoods
(C)Courieragency
Forservicesof
Rentingofmotorvehicle
Transportationofpassengers
Impartingmotordrivingskills
(Drivingschools)
AnyServiceusedinorin
relationtomfg.,ofF.P.
InputserviceUnderCenvatCredit
AnyServiceusedin
clearanceofF.P.Upto
placeofremoval
For
Manufacturer
Input
Service
means
Inclusions(Alsoinput
service)(refer*)
Exclusions(Notaninput
service)(refer**)
ForService
Provider
AnyServiceusedin
providingfor
OutputService.
Inclusions(Alsoinput
service)(refer*)
Outdoorcatering,health,fitness,beautyservices
Allinsuranceservices,travelEtc.,used/consumed
primaryforpersonalpurposeofemployee
Service portion in the execution of a works contract
and construction services listed in declared service,
layingoffoundationormakingofstructuresfor
supportofcapitalgoods,
Services provided by way of renting of a motor
vehicle in far as they relate to a motor vehicle
which is not acapitalgoods
Exclusionsin
inputservice
**
ServicesofGeneral
insurance/repairand
maintaiananceof
motorvehicle
InclusionsinInputService
forMfgr.,&SP*
1.Usedinsetup,Repair,
renovationModernisation
ofFactory/premisesofSP
2.ComputerNetworking,
ShareRegistry&Security
3.InwardTransportOf
inputsandCG/Outward
transportUptoplaceof
removal
4.Storageuptotheplaceof
removal,procurementof
inputs
5.Advertisementorsales
promotion,marketresearch
6.Accounting,Auditing,
Financing,QualityControl,
Ccoaching&Training,
Rrecruitment
7.Shareregistry,security,
businessexhibition,legal
services
Thisserviceswillbeinput
serviceonly
SPthisservices
Thisserviceswillbeinputserviceonly
(a)foraperson
whereMotorVehiclesareCapitalgoods.
(b)manufacturerofmotorvehicles
(c)Aninsurancecompanyproviding
insuranceandreinsuranceofsuchmotor
vehicles
EligibilityofPartscomponents,AccessoriesofCapitalgoods
Usedasinput
formfg.ofFP
Parts,Components
AccessoriesofCG
mentionedindefinitionin
rule2
Usedinfactory
Creditavailable
asinput
Creditavailable
asCG
Parts,ComponentsAccessoriesofCGnotmentionedindefinitioninrule2iftheyareUsedas
inputformfg.ofFPCreditavailableasinputifitnotinexclusionlist.,
CAN.RajasekharM.Com.,FCADISA(ICAI)Chennai,rajdhost@yahoo.com,9444019860
CenvatCreditRuleNo3
Rule3(1)to3(4)
Rule3(1)to(4)
ofCCR2004
3(1)
3(2)
3(3)
3(4)
Dutiesonwhich
Creditcanbetaken
Creditwhenexempted
goodsbecomedutiable
Creditwhenexempted
ServicebecomeTaxable
UtilizationofCenvat
Creit
Exceptions/RestrictionsonUtilization:
1.EDofTextiles,GSI,NCCD,&correspondingCVDS&ECpaidonall
tobeutilizedonlyforthepaymentofsametyperespectively.
2.Anyduty/taxshallnotutilizedforpaymentof1%BED&Clean
energycess
Rule3(5)to(5C)
&3(6)
ofCCR2004
Paymentwhen
CGremovedafteruse
3(5)
Computers,Peripheral's
*Amountpayable=
Cenvatcreditavailed
minus
1.EachQTR1styear10%
2..EachQTR2ndyear8%
3..EachQTR3rdyear5%
4.EachQTR4thyear1%
Fromthedateofcredit
taken
3(5)
Removalof
Inputs&CG
ApplicabletobothMfgr&SP
3(5A)
CGRemovedafteruse
asascrap(after
Usefullife)
CAN.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
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CreditavailableforMfgr,SP,on
dutypaidon1.Inputsonstock,
2.WIP3.Finishedgoodsonthedate
Towardspaymentof
1.Anydutyofexcise,STonservices
2.AmountpayablewhenInputs,CG
removedassuch.&asperrule6.
3.Anyreversalmadeunderrules.
Proviso:Creditutilizationonlyupto
duty/taxpaiduptomonthend/qtr.
End.
Removedassuch
(withoutuse)from
Factory/premises
amountequaltoCredit
availedtobepaid
Proviso:Exception(Nopaymentrequired)
1.forSP,CGremovedforprovidingOutputservice
2.forMfgr,Inputsremovedforprovidingfree
warrantyonFP
CGRemoved
afteruse(as
secondhand
goods)from
Factory/premises
Exciseduty
payableon
Sellingprice(T
V)
Computers/
Peripheral's
(Refer*)
Other
CapitalGoods
(Refer**)
ApplicabletoMfgr. CenvatavailedInputs/CGbefore
usePartlyorfullyWrittenoffor
3(5B)
Provisionmadeinbooks
OtherCapitalgoods
**
Amountpayable=
Cenvatcreditavailed
minus.EachQTR
2.5%
Fromthedateof
credittaken
Removalwithinvoice
Rule3(5)to3(5C)
&3(6)
AlltypesofExciseDuties(refertypes
ofduties)&correspondingCVDon
imports,ECandST.Nocrediton1%
BED&Cleanenergycess
Nocreditonsplcvd3(5)4%toSP
AmountequaltoCredit
availedtobepaid/
reversed
whenProvisionwrittenback,creditcanbeavailed
ApplicabletoMfgrandSP
AmountequaltoCredit
availedoninputs/input
whenWaiver(remission)granted
3(5C)
Servicetobepaid/
onFPunderRule21ofCER
reversed
Amountpayableunderrule(3)(5),(5A),(5B)and(5C)tobepaidonor
beforethe5thdayofthefollowingmonthbyutilizingCENVATcredit/
payment.ForthemonthofMarchduedateis31stmarch,failinginthis
recoveryunderrule14ascenvatcredittakenwrongly.
ApplicabletobothMfgr&SP
3(6)
Cenvatcredittobuyeronthe
AmountpaidtoSP/Mfgrunder
Rule3(5)
Buyerofthesegoodscan
availcenvatcreditonthe
amountpaid
CenvatcreditRule3(7)&4
Rule3(7)
Cenvatcredittobuyeron
purchasefrom
100%EOU,EHTP,STP
Rule4
ConditionsforallowingCenvatCredit
4(1)
Rule4(1)to4
(7)ofCCR2004
Applicabletoboth
Mfgr&SP
CAN.Rajasekhar
FCA,DISA(ICAI)
Chennai
9444019860,
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4(2)
4(3)
&(4)
4(5)
&(6)
Cenvatcreditcanbetaken
onCVDandSplCVD3(5)
Creditoninputs,availableimmediatelyafterreceivingintofactoryof
Mfgr/PremisesofSP.IncaseofJewelleryafterInputsreceivedinto
principalMfgrfactory
Creditshouldbeavailedwithin6monthsfromthedateofinvoice.
Nocreditafter6monthsWEF01.09.2014
CreditonCapitalgoods,availableimmediatelyafterreceivinginto
factoryofMfgr/PremisesofSP.AmountofCredit50%infirstyearand
balanceinnextyear.IncaseofSSI,CGremovedinsameyear100%in
firstyear
CreditonCapitalgoodsavailableeven,Capitalgoodsacquiredonhire
purchaseleaseorfinance.
NocenvatcreditwhendepreciationunderIT,claimedondutyamount.
CenvatCreditincase
Ofinputssendto
Jobworkforany
purpose
Whengoodsremoveddirectly
fromJobworkerplace
PermissionofAC/DConeyear
Valid,Subjecttoconditions
1.Noneedtoreversecenvatcreditatthe
timeofsending
2.Prooffromrecordsthattheyreturnwith
in180days
3.Ifdoesnotreturnwithin180days
reversalofcreditavailedisrequired
4.Jigs,fixtures,moulds,and,dies.Noneed
toreturnin180days.Noreversal
incaseofFull
Charge
4(7)
CenvatCredit
incase
Ofinput
Service
incaseofPartial
ReverseCharge
OtherCases
Ie100%STis
paidbySP
Afterservicetax
inthebillpaid
Afterinputservice
andServicetaxinbill
ispaid
within6monthsfrom
dateofbillorinvoiceis
received
IfSTonthebillisnotpaidwithin3months
fromthedateofinvoice,reversalofcreditis
required.Creditcanbeavailedafterbillispaid.
incaseofInputservice,whereSTpaid,is
refunded/creditnoteisreceivedbyMfgr,SP
reversalofcreditisrequired.
Rule5ofCenvatCreditRules2004RefundofCenvatCredit
1.UsedinMfgof
FP
1.InputDuty
paid/CVDpaid
2.Inputservice
STpaid
Applicabletoboth
Mfgr&SP
2.UsedIn
Intermediate
Product
FP/IPexported
Underbond/LOU
(Nodutypayable)
OSexported
(Notaxpayable)
UnderESR2005
CenvatCrediton
Input/Input
service
3.Usedin
ProvidingOutput
Service
NoRefundwhendrawbackis
claimedundercustomsrules
Refundwillbegranted
Subjecttoconditions
andsafeguards
Refund amount = (Export turnover of goods+ Export turnover of services) x Net CENVAT credit
Total turnover
Export
6000units
(Noduty)
Example1
InputA
10000units
Dutypaid
Rs.8000
Example2
InputA
10000units
Dutypaid
Rs.8000
InputX
10000units
Dutypaid
Rs.20000
OutputB
10000units
Home
Consumption
4000units
(Duty)
Refundwillbe
givenonduty
paidoninputA
OutputB
10000units
OutputY
10000units
OutputB
Fullyexported
Outputy
Fullycleared
forHC
Refundwillbe
givenonduty
paidoninputA
Rule5ofCenvatCreditRules2004RefundofCenvatCredit
1.UsedinMfgof
FP
1.InputDuty
paid/CVDpaid
2.Inputservice
STpaid
Applicabletoboth
Mfgr&SP
2.UsedIn
Intermediate
Product
FP/IPexported
Underbond/LOU
(Nodutypayable)
OSexported
(Notaxpayable)
UnderESR2005
CenvatCrediton
Input/Input
service
3.Usedin
ProvidingOutput
Service
NoRefundwhendrawbackis
claimedundercustomsrules
Refundwillbegranted
Subjecttoconditions
andsafeguards
Refund amount = (Export turnover of goods+ Export turnover of services) x Net CENVAT credit
Total turnover
Export
6000units
(Noduty)
Example1
InputA
10000units
Dutypaid
Rs.8000
Example2
InputA
10000units
Dutypaid
Rs.8000
InputX
10000units
Dutypaid
Rs.20000
OutputB
10000units
Home
Consumption
4000units
(Duty)
Refundwillbe
givenonduty
paidoninputA
OutputB
10000units
OutputY
10000units
OutputB
Fullyexported
Outputy
Fullycleared
forHC
Refundwillbe
givenonduty
paidoninputA
Rule6CCR2004Obligationofamanufacturerorproduceroffinalproducts
andaprovideroftaxableservice(Commoninputs/inputservicesfordutiableandexempted
goods&taxableandexemptedservices)
Rule6(1)&(4)
UsedExclusivelyin
1.orinrelationtoMfg.ofexemptedFPor
2.ProvidingexemptedService
1.InputDuty
paid/CVDpaid
2CGDuty
paid/CVDpaid
3.Inputservice
STpaid
UsedExclusivelyin
1.orinrelationtoMfg.ofexemptedFPor
2.clearanceuptotheplaceofremovalof
exemptedFPor
CommonInputs/inputservicefor
1.dutiableandexemptedgoodsor
2.taxableandexemptedservices)
Rule6(2)to6(6)
Option3&4shouldbeinformedin
writingtoCEOforallexemptedgoods/all
exemptedservice.Onceoptionis
exercised,itcannotbewithdrawnduring
financialyear
No
CenvatCredit
Exception:(Credit
available)
1.jobworkerofJewellery
2.Preferentialremovals
3.IncaseofCGusedby
SSIforfirst150lakhs
turnover
Option1.
Separaterecordsforinput/inputserviceusedfordutiable
andexemptedgoods,taxableandexemptedservices
Exception:Preferentialremovals
Option2.
Pay6%onvalueofexemptedgoods/servicesLessdutyif
anypaidonexemptedgoods
Option3
PayanamountequaltoproportionateCenvatcredit
attributabletoexemptedfinalproduct/exemptedoutput
services,basedonmathematicalformula
Option4
Separaterecordsonlyforinputs&Payanamountequalto
proportionateCenvatcreditattributabletoexempted
outputservices,basedonmathematicalformula
PreferentialRemovals:
FinalproductisdispatchedtoSEZunitordeveloperofSEZunit,EOU,EHTPorSTP/UNO,International
Organization.
Whenfinalproductisexportedunderbondwithoutpaymentofduty
Goldorsilverarisingincourseofmanufactureofcopperorzincbysmelting.
GoodssuppliedagainstInternationalCompetitiveBidding
Suppliedfortheuseofforeigndiplomaticmissionsorconsularmissionsorcareerconsularofficesor
diplomaticagents
Incaseoftaxableservicesprovided,withoutpaymentofServicetaxtoSEZordeveloperofSEZfor
theirauthorizedoperationRule6(6A)
AllgoodswhichareexemptfromcustomsBCD/CVDu/s3(1)
(a)againstInternationalCompetitiveBidding;or
(b)toapowerprojectfromwhichpowersupplyhasbeentiedupthroughtariffbasedcompetitive
bidding;or
(c)toapowerprojectawardedtoadeveloperthroughtariffbasedcompetitivebidding,intermsof
notificationNo.6/2006CentralExcise,datedthe1stMarch,2006
UsedPartlyin
1.orinrelationtoMfg.ofexempted
FPor
Rule6(4)
CenvatCredit
Available
Capitalgoods
UsedPartlyin
1.orinrelationtoMfg.ofdutiableFP
or
2.ProvidingtaxableService
Chennai
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Rule7DistributionofCreditbyInputServiceDistributor
(STonBilldistributionamountHO,braches,units)
Receivesinvoice
underSTRules
ManagingOfficebyManufacturer/ServiceProvider
STdistributesbyHo
throughinvoice/Challan
HO,braches,units
HeadofficeKnownasInputserviceDistributor
STpaidoninputservicewhichisusedexclusivelyformanufactureofexemptedgoods/exemptedservice
cannotbedistributed
STpaidoninputservicewhichisusedexclusivelyusedinoneunitshouldbedistributedtothatunitalone
STpaidoninputservicewhichisusedusedin
morethanoneunitshouldbedistributedas
below
Example
HeadofficereceivesAd.Agencybillfor
servicesrenderedtomorethanone
unitieHoandthreeunits
Ho30%
1.5lakhs
HO&unitshas
separate
registrationfor
eachpremises
Unit1
20%1Lakh
Unit2
HeadofficeKnownas
InputserviceDistributor
Itdistributesservicetaxbasedon
turnoverratioofthePrevious
financialyear.Iftheturnoverratio
ofHO,units1,2,&3is
30%,20%,25%&25%andifSTpaid
onthebilRs.5lakhs
25%1.25Lakh
Unit3
25%1.25Lakh
CreditcanbeavailedonST
distributionreceived
throughchallan.
TheamountofdistributionshouldnotexceedamountofSTPaid
SameasRule7insteadofST,itisEDpaidoninputs/Capitalgoods
Throughinvoiceunderrule11ofCER
Rule7ADistributionofCreditofinputs/CapitalgoodsbyInputServiceDistributor
(ExciseonBilldistributionamountHO,braches,unitssameasabove
Rule8ofCCR2004Storageofinputsoutsidefactory
Natureofgoods
Shortageofspaceinfactory
Considerations
AC/DCPermission
Byorderin
Exceptionalcircumstances
Restrictions/Conditions
Impose
Payamount/
Reversalof
Cenvatcredit
availed
Failure
limitations
Rule9ofCCR2004DocumentsandAccountsunderCenvatCredit
DocumentsforavailingcenvatcreditRule9(1)
ForExcise/CVD
Aninvoiceofthemanufacturer
factory/deport/consignmentagent
place
Aninvoiceoftheimporter
AninvoiceoftheFirst/Second
StageDealer
AsupplementaryInvoice
Abillofentry
Acertificateissuedbyanappraiser
ofcustomsincaseofgoods
importedthroughpostoffice
Priviso:
NocreditonCVD3(5)4%ifinvoice/
supplementaryinvoiceindicatenoCredit
available(Whenimportersellthegoodspaid
VatandwanttoclaimrefundofCVD)
Creditcanalsobeavailedon
Anyduplicatecopyofinvoice
Photocopyofinvoice/Anyother
documentevidencingfordutyortax
whichiscertifiedbyCEO
ForServicetax
Invoice/bill/challanoftheserviceprovider
Invoice/bill/challanoftheinputservice
distributor
SupplementaryinvoicebyServiceprovider
excepttaxpayableunderextendedperiod
limitationcases
Challanevidencingpaymentofservicetaxin
caseofreversechargeofST
Particularsofdocuments9(2)
1.AllasperRule11ofCER
2.MinimumMandatoryParticulars:
IfAC/DCsatisfiedgoods/servicereceivedand
accounted
a)Nameandaddressofissuerofinvoice
b)RCNo.
C)Descriptionofgoods/service
D)value,Duty,tax
CenvatCreditonFSD/SSDinvoiceRule9(4)
Theinvoiceshouldindicatedutysufferedorproratedutysufferedincaseproportionatestockissold
RecordsforcenvatcreditRule9(5&6)
Recordsfor
Inputs/
Capitalgoods
Inputservice
QTY.Records
ValueRecords
Receipt,Disposal,Consumption
andbalance
Duty/taxpaid,credittaken,
Utilizedandbalance
ReturnsforcenvatcreditRule9(7to11)&9A
Mfgr/SSI
ER1,ER2,ER3(SSI),ER4toER6
FSD/SSD
Annexureform
SP/ISD
ST3
Returns
CAN.Rajasekhar
FCA,DISA(ICAI)Chennai
9444019860,
rajdhost@yahoo.com
MandatoryEfiling
Whengrossduty>=10L
MandatoryEfiling
MandatoryEfiling
RevisedreturnTorectifymistakewithin90daysofORfiled
Excise Registration
Excise laws contain various elaborate procedures. The intent behind such elaborate procedures is to keep
a check and control on production activity undertaken across the country and prevent evasion of duty on
goods.
Excise procedures include:
Registration;
Maintaianance of proper production and stock registers;
Procedures, to be followed at the time of removal of goods and payment of duty;
Filing of returns; and
Special procedure for large tax payer.
Coverage of excise procedures

The procedures are covered in:
Central Excise Rules, 2002
Excise Circulars and Notifications
CENVAT Credit Rules, 2004

Central Excise Manual, 2001
Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable
goods) Rules, 2001
In this chapter we are going to study about the various important procedures contained in the excise laws.
Registration of factory/warehouse Section 6 and Rule 9 (Notification Nos. 35 &

36/2001)
Persons requiring registration
Every manufacturer of excisable goods (including Govt., autonomous corporations) on which
excise duty is leviable
An importer/dealer who desires to issue Cenvatable invoices

Persons holding private warehouses
Persons who obtain excisable goods for availing end-use based exemption notification
Exporters manufacturing or processing export goods intending to claim rebate of such duty
EOU units procuring goods from DTA or supplying goods to DTA
Persons exempted from obtaining registration (Notification No. 36/2001, dt.26.6.2001)

Persons who manufacture the excisable goods, which are chargeable to nil rate of duty or are
fully exempt from duty by a notification.
SSI units availing the slab exemption based on value of clearances under a notification. Only
declaration when the value of their clearances touches Rs. 90 lakhs.
Job-workers of readymade garments/jewellery need not get registered if the principal

manufacturer gets registered and undertakes to discharge the duty liability.
Persons manufacturing excisable goods can be exempted by following the warehousing

procedure under section 65 of the Customs Act.
The person who carries on wholesale trade or deals in excisable goods (except first and second
stage dealer, as defined in CENVAT Credit Rules, 2004).
100% EOU/SEZ, licensed under the provisions of the Customs Act, is exempted from obtaining
registration.
Unregistered premises used solely for affixing lower ceiling prices on pharmaceutical
products to comply with DPCO, 2013
Procedure for registration
Application in form A-1, duly filled up and signed, along with a self-attested copy of PAN,
should be submitted to Jurisdictional AC/DC.
For an EOU located in port towns, application should be submitted to DC/AC Customs.
If PAN is not available, a copy of the application made for PAN should be submitted.
AC/DC will scrutinize the application.
Registration certificate will be granted within 7 working days.
Registration No. is based on 15 digit PAN (ECC No.)
Range Officer and Sector Officer shall verify the address within 5 working days after
registration.
Other provisions with regard to registration

Separate registration is required in respect of separate premises except in cases where two or
more premises are actually part of the same factory.
Registration certificate may be granted to minors if guardians conduct business.
If there is any change in information given in form A-1, the change should be informed in a
fresh form A-1
Registration is not transferable.

Any change in constitution to be intimated within 30 days of change. No fresh registration is
required in such a case.
Procedure to be followed in case of closure of business

Assessee will have to apply for de-registration, surrender the original Registration Certificate
and pay duty up to the date of closure of business.
Registration can also be revoked or suspended if manufacturer or his employee breach any of
the provisions of Central Excise Act or Rules or has been convicted under section 161 of Indian
Penal Code.
Penalty for non-registration
Up to the duty payable on contravening goods or Rs. 2,000 whichever is higher.
In addition, the goods can also be confiscated.
It is also an offence under section 9 of the CEA. Imprisonment up to seven years (minimum 6
months) can be imposed.
Factory under Central Excise - Section 2(e)
It is important to know the meaning of word Factory as it is the place to be registered for excise purpose.
Factory means any premises, including the precincts thereof, wherein or in any part of which,
excisable goods are manufactured.
Precincts refer to the area enclosed by compound wall. A canteen, a recreation club, a shed and
a cycle stand, located inside the compound wall will come under the definition of a precinct.
Whole premises will be factory if in any of its part, excisable goods are manufactured.
It is not necessary that factory should be registered under the Factories Act.
Excise returns
Periodical returns - Rule 12
The following are the various returns which are to be filed by the assessee. The returns are required to be
filed in quintuplicate, and the assessee will have sixth copy as his record copy.
Form of Return
Description
Who is required to file
Due date for filing return
ER-1 [Rule 12(1) of Monthly Return by large Manufacturers not eligible 10th of following month
Central Excise Rules]
units
for SSI concession
ER-2 [Rule 12(1) of Return by EOU
EOU units
ER-3
Assesses
availing
concession
Quarterly Return by SSI
10th of following month

SSI 10th of following month of a
quarter
ER-4 [Rule 12(2) of Annual

Financial Assessees paying duty of Rs. Annually by 30th November of
Information Statement
one crore or more per succeeding year
annum through PLA
relating
ER-5 [Rules 9A(1) and Information
9A(2) of CENVAT Credit Principal Inputs
Rules]
to Assessees paying duty of Rs. Annually, by 30th April for the

one crore or more per current year (e.g. return for 2010annum through PLA and 11 is to be filed by 30-4-2010].
manufacturing goods under
specified tariff headings
ER-6 [Rule 9A(3) of Monthly return of receipt

CENVAT Credit Rules]
and consumption of each of
principal Inputs
Assessees
required
submit ER-5 return
to 10th of following month
ER-7 [Rule 9A(4) of Annual Installed Capacity

CENVAT Credit Rules]
production Statement
Assessees
required
submit ER-5 return
to Annually, by 30th April for the

current year (e.g. return for 201011 is to be filed by 30.04.2010].
Dealer/Importer return
Quarterly Return
Dealer/Importer who issue 10th of following month of a

cenvat invoice
quarter
Quarterly return
Quarterly Return
Manufacturer
goods
Financial information Sec Annual Return

15 a FA 2014
From 06.08.2014
of
1%,2% 10th of following month of a

quarter
Specified persons like bank, Section is similar to section

Sub registrar, assessee
285BA
Annual
Finance
information under Income tax At
Exemption from ER-7

Certain Manufacturers are exempt from filing of Annual Installed Capacity production return such as biris
manufactured without the aid of machines, matches manufactured without the aid of power & reinforced
cement concrete pipes (Notification dated 26/2009, dt.18.11.2009).
E filing of returns : E-filing of returns is mandatory when the gross duty liability is Rs.10 lakhs or more
ProcedureforExportofgoodsRuleNo18&RuleNo19
PaydutyandClaimrefund/
rebateafterexportRule18
ExecuteLOUT/Bondwithout
paymentofdutyRule19
Methods
OfExport
1.Manufacturer
cumExporter
Personswho
canexport
goods
2.Merchant
exporter
3.EOU/EHTPETC
ProcedureUnderSealofCEO
ExporterPrepare
FormAREI5copies
colourbandsubmitto
CEObefore24hrs.
Exportersubmit
proofofexport
Invoiceunder
Rule11,Shipping
billandother
documentstobe
preparedby
exporter
Timetoexport
maximum6
months
Refundofduty/
releaseofbond
Procedure
1.UnderSealofCEOor
2.Selfsealingbyexporter
Exportgoods
TosubmitLOUT
Purose
without
toAC/DCof
paymentofduty
CentralExcise
TosubmitB1Bond
togetCT1form Purose togetgoodsfrom
MFGRwithout
fromSupt.of
paymentofduty
CentralExcise
TosubmitB1Bondto Purose togetgoodsfrom
MFGRwithout
getCT3formfrom
paymentofduty
Supt.ofCentralExcise
CEOinspection
Verficationof
documentsofgoods
Certificationof
AREI,andsealing
ofgoodsbyCEO
Customs
certificationof
AREI/shippingbill
DistributionofAREI
CEOretainlast2
copies
ProcedureUnderselfSealBy
Exporter
Sameasaboveexcept
1.AREItobesubmittedtoCEOafter24hoursofexport
2.SelfsealingmyexporterinsteadofCEOverificationandcertification
inAREI
ProcedureforwarehousegoodsRuleNo20
Notallexcisegoodscanbestored,Warehouseregisteredunderexcise.Maximumperiodofstorage90days.
Consignorprepare
AREIII4copiesand
invoice3copies
Despatchofgoods
Towarehousewith
thedocuments
Consigneehastomaintain
accounts.
Dutyliabilityonconsigneeif
doesnotpaidbyconsignor
Warehouse
keeper(consignee)
Verifygoodsandnotify
discrepancyifanyinARE
III(rewarehousing
Certificate)
Rewarehousing
Certificatenot
receivedwithin90
days,consignorhasto
pay
ConsigneesendAREI
Tohisjurisdictional
CEO&Consignor
Rangesupt.,of
consigneewill
countersignARE3send
tothejurisdictionalCEO
ofconsignor.
Demand(Recovery)ofExciseDutySec11AofCEA
Notlevied
(N.L)
Shortlevied
(SL)
NotPaid
(N.P)
ExciseDuty
Showcause
notice
(SCN)
Shortpaid
(S.P)
11A1(a)Normal
Period1yearfrom
relevantdate
Erroneously
refunded
(ER)
NLDutiabletreatexempt/Nil
SLLowerrateapplied
NP/SPValuationdifferences
Normalcases
11A1(a),2
Paidduty+int.before
receivingSCN
paymentonown
ascertainmentor
ascertainmentbyCEO
Nopenalty
IntimationtoCEOin
writing
Toextentpaid,
proceedingconclude
Shortfallamountifany
CEOissueSCN
Contents,
Mannerof
Issue
Date,Nameandaddressof
Assessee.,Amountpayable
alongwithcalculation,CEO
sign,Servingthroughpost,
noticeboardofAssessee/
Dept.
NoSCN
Timelimit
Assesseevoluntarily
Paysbeforeissueof
SCN
ExtendedCases
11A(6)(7)
Audit,investigation,
verification,reveals,fraudetc.
Paidduty+int.Penalty1%p.m.,
subjecttomax25%ofduty,
beforereceivingSCN.
Paymentonthebasisofown
ascertainmentor
ascertainmentbyCEO.
IntimationtoCEOinwriting.
Toextentpaid,proceeding
conclude.
ShortfallamountifanyCEO
issueSCN
11A(4)Extended
Period5yearsfrom
relevantdate
Forcomputationof1yor5y,periodofstayby
court,tribunaltobeexcluded11A(8)
Extendedperiodapplicable
1.Fraud,collusion,willfulmisstatement,
suppressionoffacts,,Violationofexciselaw
withintentiontoevadeduty,
2.Audit,investigation,verificationreveals
fraudcollusionetc.,11A(5)
Relevantdate
1AssesseefilereturnDateoffilling
2AssesseedoesnotfilereturnDuedateof
return
3ProvisionalassessmentDateofadjustment
tofinalduty
4ErroneousrefundDateofrefund
5OthercaseDateofpaymentofduty
SCNissuedafterlapseoftimelimit,itisinvalid.
Incaseofextendedperiod,itisonthepartofdepartmenttoprovefraud,collusionetc.,onthepartofassessee.
AdjudicationordersofCEOSec11A(10)ofCEA
PayDuty+MandatoryInterest(sec
11AA)+PenaltydutyorRs.2000/
WEH(waiverofpenaltyreasonable
causeoffailure)
Normal
period
Assessee
accept,do
notdiffer
SCN
Receivedby
Assesseewith
intimelimit
PayDuty+MandatoryInterest(sec
11AA)+MandatoryPenaltysec11AC
Equaltoduty(waiver75%ifduty+
interestispaidwithin30daysofscn)
Extended
Period
Assesseedo
notaccept,
differ
Representation
throughAR(CA)
TimelimitforadjudicationordersofCEOSec11A(11):
Normalcases6monthsfromthedateofnotice
Extendedperiodcasesoneyearfromthedateofnotice
Thewordsshallwasusedandhence,itcanbe
mandatorytimelimitforCEO
Whereappellateauthoritymodifiesduty,theinterest
andpenaltyshallstandmodifiedaccordingly11A(12)
SCNWillbe
Assesseeviewfully
droppedbyCEO
acceptedbyCEO
Amounttobe
determinednot
morethanSCN
amount.
Assesseoption
appeal
Assesseeviewfully
rejectedbyCEO
Assesseeview
Partlyaccepted
&partlyrejected
byCEO
Acceptedportion
SCNWillbe
dropped.Rejected
portionAmountto
bedetermed
MandatoryInterestincaseofRecoveryofDutySec11AA
Rate
Intereston
Dutyincase
ofSCN
Period
18%p.a.
from1stdayofsucceedingmonthofduedateto
dateofpayment
Ex:April2010SCN,dutyduedateMay5th.
IntereststartsfromJune1st
1.IfSCNamountwasincreasedinappeal,Interestonincreasedamountispayablefromdateoforder
Sec11A(13)
2.InterestispayablewhethertheadjudicationordershowninterestseparatelyornotSec11A(14)
ForOthersectionsfrom11ACto11E,Pointwise,selfexplanatoryreadthebook
ExciseRefundSec11B
DoctrineofUnjust
Enrichmentapplicable
Sec12B
Refund
Application
1year
fromR.D
FormR
Encloseproof
11B(1)
Determine Refund
Order
Amount
AC/DCSatisfied
11B(2)
Refunddue
TL3M
delay,int6%
DoctrineofUnjust
p.a.11BB Enrichmentnotapplicable
Refundamount
Creditto
ConsumerWelfare
fund
Refundamountto
Assessee/Applicant
provisioto11B(1)
ByMfgr/Buyer(FSD/SSD)
RelevantDate:
1IncaseofExportRebate
Exportthroughaircraft/vesselDateofleaving
aircraft/VesselExportthroughvehicleDateof
leavingcustomfrontierExportthroughpostDateof
dispatchofarticle
2IncaseofCompoundlevyschemeDateof
reductionofduty
3InCaseofExemptionu/s5ADateofexemption
order
4InCaseofProvisionalAssessmentDateoffinal
adjustmentofduty
5IncaseofFSD/SSDDateofPurchaseofgoods
6IncaseofOrderofcourt/AppellateauthorityDate
oforder7InanyothercaseDateofpaymentofduty
DoctrineofUnjustEnrichment/Refundcreditto
consumerwelfarefund
Itisalwaysassumedunlesscontraryprovedby
manufacturerthatexciseDutyburdennormally
fullypassedontobuyersec12B
Insuchcases,refundofexcessdutypaidtothe
manufacturerwillamounttoexcessandun
deservedprofittohim.
HewillgetdoublebenefitOnefrom
consumerandagainfromtheGovernment.
Atthesametime,thedutyisillegally
collectedandhencecannotberetainedby
Government,itwillbecreditedtoConsumer
welfarefund
Thefundmaybeusedforactivitiesof
protectionandbenefitofconsumers.
ProvisionsofUnjustenrichmentwillapplytoall
typesofrefund,(ProvisionalAssessment,Captive
consumptionDutypaidunderprotestetc)
NonApplicabilityofDoctrineofUnjustenrichment(Refundpaidtomanufacturer/buyer)
Whendutyispaidunderprotestandonlyloweramountofdutyischargedtocustomer
Predepositofdutypendingappeal
Whencontractisforpriceinclusiveofallduties
Whendebitnoteisraisedbybuyerandamountdeductedfrombill
Whencreditnoteissuedtobuyerandbuyeraccountiscredited,
Refundofexportrebate/incentive.
Deposittakenfrombuyeragainstpossibleliabilityofexciseduty.Anddepositrefunded
ForComparisonwithcustomsandservicetax,readchapter13DivisionIVofthebook
Hierarchy
Excise Administration
Ministry of Finance
Central Board of Excise and customs (CBEC)
Principal Chief Commissioner of Central

excise
Chief Commissioner of Central excise
Sec 2(b) : C.E.O

Sl No. 1 to 9 & Officer CE Dept., Officer of State,
Central Govt. powers entrusted by CBEC
Principal Commissioner of Central excise/
Commissioner of Central excise/

Commissioner Appeals
Additional/Joint Commissioner of central

Excise
8
9
Sec 2(a) : Adjudicating Authority:

(Authority competent to pass orders under Act
except Commissioner Appeals and CESTAT
Deputy Commissioner of Central excise
Assistanct Commissioner of Central excise
Superintendent of central Excise
Inspector of central Excise
Segregation of functions/Divsion of work

Country
Head / incharge
Divided in to
Zones
Head / incharge
Chief Commissioner
Divided in to
Commissionerate
Head / incharge
Commissioner
Divided in to
Division
Head / incharge
DC/ AC
Divided in to
Range
Head / incharge
Superintendent
ExciseAssessments
CE Rule 2(b), Assessment includes selfassessment of
duty made by the assessee and provisional assessment
madeunderRule7
Itnormallyimpliesdeterminationofdutyliability
1SelfAssessment
Rule6
Typesof
Assessments
2.Provisional
AssessmentRule7
3.BestJudgment
Assessment
SelfAssessmentRule6
Assesseedetermines
classification&
Valuation
AssesseePays
Appropriateduty
FilesMonthly
returnsER1/2/3
Incaseofcigarettes,dutywill
beassessedbythe
superintendentofexcise
beforeremovalofthegoods
CEOScrutinizethereturn,
Inspection,Verification
SCNifrequire
ProvisionalAssessmentRule7
AssesseeUnableto
determines
classification/Rateof
duty&Valuation
Assesseedeclares
InSelfAssessment
memorandum
RequesttoAc/DC
forProvisional
Assessmentwith
reasons
Timelimitto
B2bond AC/DcallowPAand
completeFA
hedeterminerateof
dutypayable
6months
ExtentionByC6
months
BYCCbeyondone
year
FinalAssessment
(FA)
BestJudgmentalAssessmentChapter3PartIVPara
3.1ofCBE&CsCEManual
Best judgment assessment is made:

Whereassesseefailstoproviderecord/informationforthepurposeofassessment
andWherethedepartmentisunabletoissuedemand.
Assessmentdonewillbebasedonavailableinformation.
Demandwillbeissuedifnecessary.
Burdentoprovideinformationforredeterminationofdutyisonassessee.
FAduty>PAduty=
Assessepayduty+18%int.
FAduty<PAduty=
RefundtoAssesse+6%in
SmallscaleIndustries(SSI)NotificationNo8/2003dt01.03.2003
1.ManufactureSpecifiedgoodsListedinnotification.
(CoversAllmostallgoods.Exceptfewgoodssuchaswatches,matches,
heavyIronandsteel,tobaccoproducts)
EligibleCriteria
(togetSSI
Benefit)
Relevantfactorstoconsider
2.Previousfinancialyearturnover(Eligibleclearanceforhome
consumption)forofassesseeislessthanRs4crores(400lakhs)
Ex.TurnoverFY201112<400L,SSIBenefitavailableinFY201213
Irrelevantfactorsin
criteria
SSIBenefit
Provides
Example
1.InvestmentinPlantandMachinery
2.Nooflabouremployed
3.RegistrationasSSIunderIDRIandotherActs.
1.FYTurnoverUptoFirstRs.150
LakhsDutyexempt.Noduty
payable.Exemptionavailable
onlyforBEDandSED.Other
dutiespayable
2.TurnoveroverRs.150lakhs,
normaldutypayable.
Inputs/InputsService,notavailable.
Cenvat Capitalgoods100%availableinfirst
Credit year..Bututilisation,over150lakhs
Cenvat
Credit
Available.
April2012toJuly2012turnoverRs.150Lakhs.Dutyexempt.
OnturnoverfromAugust2012,normaldutypayable..
ProceduralConcessionsforSSIunits
NoregistrationisrequireduntiltheycrossRs.150Lakhsofturnover.
Quarterlyreturn
Paymentofdutyistobedonequarterlyinsteadofmonthly
100%CENVATcreditisavailableoncapitalgoodsinthefirstyear.
OneConsolidatedentryinPLAforallremovalsduringtheday.
Auditshouldbedoneonceevery2to5years.
Exemptionforpaymentofdutyifgoodsmanufacturedunderbrandnameofothersinruralarea.
ObligationofSSI
FileadeclarationwithSuperintendentwhentheturnovercrosses90lakhs.
Getaregistrationandmaintenanceofrecordswhenturnovercrosses150lakhs.
SmallscaleIndustries(SSI)NotificationNo8/2003dt01.03.2003
Clubbing provisions of SSI
Whencalculatingthelimitsof150lakhsand400lakhs,thefollowingfactorswillbeclubbed:
Turnoveroftheallproductsmanufactured/allthefactoriesorunitsoftheassessee
Turnoveroffactoryusedbymorethanonemanufacturerinafinancialyear
Turnoverofclearanceinthenameofbogus/dummy/shamunitsTurnoveroftwounitswherethereissubstantial
fundingbetweentwounits
Turnoveroftwounitswhenchangeofownershiptakesplaceduringthepreviousyear
However,thefollowingwillnotbeclubbed:
Turnoverofunitsofrelatives/Turnoverofsamemanagementunits
Turnoveroftheunitshavingseparateregistration/separateassessment/
Turnoverofunitshavingcommonpartners/commondirectors
Calculationofturnoverforlimits(Valueofclearances)
ThecalculationmodeforRs.150andRs.400lakhsissameexceptfewitems.
CommonExclusionsfor150and400lakhs
Thefollowingshallbeexcluded/notbeconsideredfromtheturnovercalculationfor150lakhsand400lakhs
ExportturnoverotherthanfromexportstoNepalandBhutan
ClearancetoSEZ/STP/EHTP/EOU/FTZ/EPZ/withoutpaymentofduty/UnitedNationsorganization
Exportunderbondthroughmerchantexporter
Turnoverofgoodsmanufacturedwithothersbrandnameinurbanarea(NoSSIbenefit,dutypayable)
Turnoverofinputs/capitalgoodsboughtbyassesseeandclearedassuch(sinceitisnotamanufacture)
Jobworkturnoverexemptundernotification214/86,83/94and84/94
Goodsmaybeexemptundersomeothernotification,i.e.otherthanSSIexemptionnotificationFinalproductofsuch
goods
ValueofintermediateproductsusedasinputsinmanufacturingfinalproductswhichareeligibleforSSIexemption
Jobworkoftest,repairs,reconditioning,processing,etc.whichisnotamanufacture.
CommonInclusionsfor150and400lakhs
The following shall be taken in to account while calculating the turnover (value of clearances for both 150 lakhs and 400
lakhs):
ExportstoNepalandBhutan(Tobeincludedevenmoneyreceivedinforeigncurrency)(
Goodsmanufacturedwithothersbrandnameinruralarea(SSIneednotpaydutyonthesegoods,Butincludeforlimits)
ClearanceswhichareeligibleforSSIbenefitwherenodutypayable(goodsmanufacturedinthebrandnameofKhadi
village,Nationalsmallscaleindustries,TurnoverofPackingmaterial,notebooks,writingpads)
Goodsmaybeexemptundersomeothernotification,i.e.otherthanSSIexemptionnotificationIntermediateproductof
suchgoods
TurnoverofgoodschargedtoNilduty
TurnoverofNonexcisablegoods
Differentialtreatment
Thefollowingistobeincludedin400lakhslimitscalculationandtobeexcludedfor150lakhslimitscalculation
TurnoverofgoodswhichareexemptfromdutyotherthanSSINotificationandOtherthanJobworknotification(For
exampleU/s5Anotification)
Appeals under Central Excise

Appeals to Commissioner
appeals sec 35 & 35 A
Adjudication Order passed
by any CEO below the
rank of CCE
Assessee
aggrieved
Demand Order u/s 11A(2)

Confiscation, Penalty Order
u/s 33 by JC, AC/DC, SCE)
Admissibility of Additional Evidences[Rule 5

of Central Excise (Appeal) Rules]
Admission by CCE on his own: Rule 5(4) -- He
can admit additional evidences whenever he
deems necessary
Mandatory
Pre-deposit of
Form EA1, Fee
duty
Appeal to
As
per
new
60 + 30 days Commissioner(CCE) Condition
section 35 F
(condone)
Grant of Adjournments during

hearing (Max. 3) -35 (1A)
Additional Grounds may be heard
(refer *) -35A (2)
Order (recommendatory time
limit 6 months)-35 A
No power to remand
back case to CEO
When can assessee appeal for admission of

additional evidences Rule 5(1): Assessee is
entitled under following situations:
(a) where the adjudicating authority has
refused to admit evidence which ought to
have been admitted; or
(b) where the appellant was prevented by
sufficient cause from producing the evidence
which he was called upon to produce by
adjudicating authority; or
(c) where the appellant was prevented by
sufficient cause from producing before the
adjudicating authority any evidence which is
relevant to any ground of appeal; or
(d) where the adjudicating authority has made
the order appealed against without giving
sufficient opportunity to the appellant to
adduce evidence relevant to any ground of
appeal
Notice to
parties
&Hearing
Powers of
Commissioner(CCE)
Confirming
Annuling
Increasing the liability of assessee
Modifying
decreasing the
liability of
assessee
SCN with in time limit is mandatory
Rule 5(2)-CCE admit additional evidence by records in writing for

reasons
Rule 5(3)- if Additional Evidences are admitted by CCE (Appeal),
then the other party connected in appeal shall be given an
opportunity to examine that evidence and to rebut/challenge
that evidence]
CA N.Rajasekhar FCA,DISA(ICAI) Chennai 9444019860, rajdhost@yahoo.com
Appeals under Central Excise- 2

Appeals to Tribunal sec 35B,35 C & 35 D
Assessee
aggrieved
Adjudication Order passed

by CCE/PCCE
Demand Order u/s 11A(2)

Confiscation, Penalty Order
u/s 35 CCE
Form EA3, Fees & mandatory

pre-deposit of duty or penalty
7.5%/ 10%
Appeal to CESTAT
90 days +
(condone)
Dept(CEO) Adjudication
Order
aggrieved
passed by
EA 5- 30 CCE Appeals
Power to refuse to admit appeal if duty /penalty <

2lakhs other than rate of duty and valuation cases
Powers of
CESTAT
Adjudication Order passed by

CCE Appeals u/s 35A- other
than 4 below
days+
condone
The other party shall get a right to

Memorandum of CrossObjections - Form: EA-4
hearing file
Grant of Adjournments during hearing (Max. 3)-35C (1A)
Rectification of mistake apparent on record with in 6

months(on brought to notice by party in appeal/CCE, on
its own
i)Loss in Transit;
ii)Rebate of Excise Duty;
iii)Export without duty payment;
iv)Admissibility of Cenvat Credit)
In respect of ii, iii and iv-order
was <= 50,000-[However,
in
case
of
Determination of Rate of
Duty / Valuation order >
50,000- can be appealed to
CESTAT]
Increasing the liability of assessee, decreasing refundOpportunity

Order (recommendatory time limit 3 years-35C(2 A). In
case of Stay granted-180 days, otherwise stay vacates
Remand back
case to CEO
Confirming
Revision Application to C G
Order for Fresh assessment considering
additional evidence if any
Other inherent Powers of CESTAT:
1.Recall dismissed order, if deposit of duty as ordered paid late
2. Quash its own order, if found obtained by fraud, disregard of
statutory provision, by mistake
3.Correct an error so that justice is done
The above powers are subject to some limitations.
Annuling
Increasing the liability of assessee
Modifying
decreasing the
liability of
assessee
SCN with in time limit is mandatory

Tribunal has no powers to review its orders on its own.
CA N.Rajasekhar FCA,DISA(ICAI) Chennai

9444019860, rajdhost@yahoo.com
Appeal to High court & Supreme court

Substantial
Question of law
Other than rate of
duty, valuation
Order of CESTAT
180
days
Appeal to
HC -Sec 35 G
Regarding Rate of duty or tax /Valuation

(It include determination of taxablelity or
excisability)
HC Certifies
Fit for appeal
60
days
Appeal to
SC-Sec 35L
Whether particular activity is a manufacture or not/ taxable service or not, whether it is changeable or not
under the act is coverd by the cases of rate of duty and valuation and hence appeal lies with Supreme Court
Commissioner of Service Tax v. Ernst & Young Pvt. Ltd. 2014 (34) S.T.R. 3 (Del.).
Revision Application to
Central Government- Sec 35 EE
Order of CCE
Relating to
4 matter
Revision application
By assessee
Form EA 8,
3+ 3 M
order for Duty, Penalty < 5000 reject No time
Suo- moto Revision my CG

Revision application
By CEO
i)Loss in Transit;
ii)Rebate of Excise Duty;
iii)Export without duty payment;
iv)Admissibility of Cenvat Credit)
In respect of ii, iii and iv-order was
<= 50,000-[However,
in
case
of
Determination of Rate of Duty /
Valuation order > 50,000- can be
appealed to CESTAT]
limit
Form EA 8,
3+ 3 M
1.Order- Annul/ Modify

In case of enhance SCN- with in T L.
2.Enhancing penalty, fine in lieu of ,
Confiscation-SCN with in one year
from the date of order sought to be
annulled/modified
CA N.Rajasekhar FCA,DISA(ICAI) Chennai 9444019860,

rajdhost@yahoo.com
ExciseSettlementCommission
FormSC
E1
Application
toSC
Fees
Assessee
Sec31
PersonLiable
topayEDor
Mfgr,
Registered
personunder
rules,WH
Keeper
Settlement
Commission
Acceptsappl
Reportcalled
FromCCE,7days
Conditions
Sec32E
CCEreportsin
Onemonth
ExciseReturnfiled,dutyPaid(ButSCpowertoallowby
recordingsreasonseventhisisnotfulfilled)
SCNhasbeenreceived(i.e,proceedingsstandspending);
Admittedadditionaldutyliability>Rs3lacs
Admittedadditionaldutypaidalongwithint.
ProceedingsshallnotbependingbeforeCESTATorHCorSC.
Whenthematterisnotremandedforfurtheradjudication
Question involved shall not be related to Classification of
Goods
Books of Accounts // Other Documents have been seized Settlement

Applicationshallbemadeonlyafterexpiryof180daysfromthedateofseizure.
NoticetoAssesseewithin7daysofappl.Whyapplicationshould
beallowed
OrderofSettlementCommision
Within14daysof
NoticetoAssessee
90Days+3months
Delayproceeding
abate
Rejection
Settlement
Order
Order
Acceptance
order
Condition
Condition
Admittedadditional
dutypaidalong
withint.attimeof
appl.(submit
proof).
Failuretoreport,byCCE,
presumedCCEhasno
objectionsincaseandSC
acceptsApplication
Chennai9444019860,
rajdhost@yahoo.com
Onceapplication
madecannotbe
withdrawn
Orderconclusive
matterscantbe
reopenedinany
otherproceedings
(likeappealetc)
Opportunity
throughAR
Speakingorder.
Opportunityto
assesseebefore
rejection
AmountDuty+intetc
(notlessthanwhatoffered).
Mannerofpayment
(lumpsumorinstallment)
Otherincidentalmatter
Matterscoveredbythe
application/not
Order coveredbythe
On application,asperthe
reportofthe
commissioner.
OrderShallalsoprovidethat
Matteroforderwillreviseand Consequence SETTLEMENTWILLBEVOID
allowedtoproceedsbyCEO
(abinitio)ifsubsequently
foundthatithasbeenobtained
NoPower1.towaiveinterest,2.Criminal
byFraud//Misrepresentation
prosecutioncommencedbefore
application,3.extensionoftimefor
paymentasperorder
Immunityfrom
penalty,fine
AllPenaltiesandfine
underexciselaw
Commissioner
ofExcise
Sentbackcase
toCEO
Ifassesseenot
coperated
PowersofSC
SChasAllPowersofCEO/Judicialpowers
OrderforProvisional
attachmentpropertyinthe
interestofrevenue
Orderceaseifdueamountis
paid.
Orderforimpositionofpenalty
forConcealmentofdutyliability.
ExciseAuthorityforAdvanceRulingSec23Ato23H
RecordscalledFromCCE,
4copies
Applicant
Sec23A
Fees
1.NRJvwithR/NR
2.RJVwithNR
3100%subsidiaryof
ForeignCompany
4.ExistingJVinIndia
5.Publicsector
6.Residentpublic
ltd
7.ResidentPvtLtd
company
Returnrecordsassoonaspossible
ApplicationTo
AARSec23C
Commissioner
ofExcise
AAR
Eligible
Question
1.Determinationofliabilitytoexciseduty,underCEA,
1944(ie,whetherthegoodsareExGoodsorwhether
theprocessamountstomanufacture.
2.PrinciplesofValuationofGoods
3.Classificationofgoods
4.ApplicabilityofE/Nissuedu/s5A(1)OrCEA/CETA/
OtherAct
6.AdmissibilityofCenvatCredit
Applicationcanbewithdrawnwithin30daysofmaking
suchapplication
Chennai9444019860,
rajdhost@yahoo.com
AdvanceRuling:Sec23A
meansDeterminationofa
QUESTIONOFLAW/FACT
(asspecifiedinApplication)
byA.A.R.inrelationto.an
activityproposedtobe
undertakenbytheapplicant
OrderofAARsec23D
90Days
Acceptance
order
Condition
Appl:Shallnotbe
allowed:
1.Applicant
Questionispending
before
CEO,Tribunal,Court
2.Questionalready
Decidedby
CEO,Tribunal,Court
Rejection
Order
AROrder
OrderBindingon(Sec23E)
1.Applicant
2.JurisdictionalCEO
BindingTill:
Lawchanges
Condition
Speakingorder.
Opportunityto
assesseebefore
rejection
Nevermade
applicationtoAAR
Consequence
Examinematter,
Opportunitytoapplicant
beingheard.
CopytoCEO,Applicant
OrderisVOID(abinitio)if
subsequentlyfoundthatithas
beenobtainedbyFraud//
Misrepresentation
BenefitofseekingadvancerulingfromAuthoritywouldbeapplicableonlyinrelationtoactivitywhichisproposedtobe
undertaken(&notinrespectofthatwhichhasalreadybeenundertaken)MCDONALDSINDIAPVT.LTD.
MerelybecauseanothersubsidiaryiscarryingoutthesameactivityanditscaseispendingwiththeCEO,another
subsidiarywillnotbecomeineligibletoobtainARinrelationtosamequestion.
A.TEX(INDIA)PVT.LTD.SC
ExciseCivilPenalties
Offence
Underrule
25/26/27
Violationof
Exciselaw
SCNto
Mfgr/WHK/
dealer/Any
person
Opportunity
beingheard Impositionof
Penality
ExciseMonetarypenalty
OffencesUnderRule25
Removingexcisablegoodsincontraventionofexciserulesornotificationsissued
undertherules;
Notaccountingforexcisablegoodsmanufactured,producedorstored;
Engaginginmanufacture,productionorstorageofexcisablegoodswithoutapplying
forregistrationcertificateundersection6oftheCEAct;
ContraveninganyprovisionofCentralExciseRulesornotificationsissuedunder
theseruleswithintentiontoevadepaymentofduty.
OffencesUnderRule26(1)
Anypersonwhoknowsorhasreasontobelievethatexcisablegoodsareliableto
confiscation
Acquirespossessionofsuchexcisablegoodsor
Transportsremoves,deposits,keeps,conceals,sellsorpurchasessuchexcisable
goodsor
Inanyothermanner,dealswithanysuchexcisablegoods
Penality
canbe
leviedon
Doesnotissueinvoice/issuesexciseinvoicewithoutdeliveryofgoodsspecified
therein/Issuesanydocumentswhereonreceivertakesanyineligiblebenefitof
CENVATorrefund
OffencesUnderRule27:Generalpenalty:Forbreachofexciserules,ifnopenaltyhas
NonMonetary
(confiscation)
Mfgr/WHK/dealer
MaxRs.2000/or
dutyongoods
whicheveris
higher
&Confiscation
Anyperson
Penality MaxRs.2000/
canbelevied ordutyon
on
goodswhich
everishigher
Penaltycan
belevied
on
OffencesUnderRule26(2):
Monetary
Anyperson
MaxRs.5000/
orValueof
benefitwhich
everishigher
Penaltycan
belevied
Anyperson
on
MaxRs.5000/
And
Confiscation
Alsoposssible
beenprescribedunderActorrules
ExciseNonMonetarypenaltyConfiscation
Offence
Under
rule25/
27
SCN
Opportunity
beingheard
Releaseofgoods
Storagechargestillreleaseofgoods
Exercisedby
defaulter
payable[Rule30]
Suchgoodsshallbesoldoffinsuch
mannerasCCEmaydirect
Ifgoodsareofhazardousnature,
thenCCEmaydirectdestructionof
goods.[Rule29]
Confiscation
OrderbyCEO
Option
NotExercised
bydefaulter
Optiontopay
[RedemptionFine/Fine
inlieuofConfiscation]
canbegranted[Sec34
ofCEA)
ExciseCriminalOffencesSection9
Prosecution
Launched
Casereferred
toCriminal
court
Accused&
prosecution
order
CriminalOffences(imprisonment)
1)PossessionofTobaccoinexcessofprescribedquantity;
2)Evadingpaymentofexciseduty;
3)Removalanyexcisablegoodsincontraventionofany
provisionsofCEA/Rulesorinanywayconcernhimselfwith
suchremoval;
4)Acquiringpossessionof,or
In anyway concerning himself in Transporting/
Depositing/ Keeping/Concealing, selling or
purchasing,or
Inanyothermannerdealingwith
goodswhichheknowsorhasreasontobelieveareliable
toconfiscation;
5)ContraventionofanyprovisionsofCenvatCreditRules,
2004;
6)Failuretosupplytheinformationwhichheisrequiredto
supplyundertheactorsupplyingfalseinformation;
7)Attemptingtocommitorabettingthecommissionof,first
twocategoriesofoffences.
1sttime
Prosecution
Subsequent
Prosecution
ED>1lakh,upto7Years,
Fine
Othercasesupto3years,
fineatthediscretionofcourt
Upto7Years,Fine
Termof7yearsimprisonmentcanbereducedtoa
minimum of 6 Months if the Court, shall be
satisfied that there exists SPECIAL & ADEQUATE
REASONS.
Reasons not admissible as Special & Adequate
Reasons:
i) Conviction for the first time ii) Penalty has
already been imposed/ Goods have been
confiscated/Otheractionhasbeentakeniii)Ageof
theaccusediv)Accusedmerelysecondaryparty,
nottheprincipaloffender
Sec9A
Offence to be noncognizable: No arrest in respect of these Offences shall be
madewithoutobtainingarrestwarrant.
Offence can be Compounded: For that request to be made to Chief CCE (such
request can be made before launch of prosecution proceeding and even after
launch of prosecution proceeding) Any of the offence is compoundable on
paymentofprescribedfee.
Therearecertainguidelinesforarrestandbailread,,CBEC vide CircularNo.974/08/2013CXdated

17.09.2013
Pre-deposit of duty in appeals and refund of such duty

Sec 35 F Effective from 06.08.2014 & Classification through Circular No.
984/08/2014 CX dated 16.09.2014
The predeposit of duty in case of appeals is as follows.
Stage of appeal
Appellate
Authority
First appeal
(a) Order
CEO Commissioner
Below
the Appeals
rank
of
Commissioner
(b) Order
of CESTAT
Commissioner
Second appeal
Order of
Commissioner
Appeals
CESTAT
Mandatory Quantum of pre-deposit of duty demanded
7.5% of the duty where only duty or both duty and

penalty are in dispute
OR
7.5% of the penalty where only penalty is in dispute
The amount of pre-deposit shall not exceed `Rs.10 crores.
Example : JC of Excise confirmed duty demand on X ltd
Rs. 10 lakhs + Penalty u/s 11 AC Rs. 10 lakhs + Penalty
under CE rules 26 Rs. 3 lakhs
Pre deposit = 10 lakhs x 7.5% = Rs.75000/- No pedeposit
on penalty Rs. 13 lakhs
Example 2
AC of Excise confirmed Penalty on X ltd .u/s 11 AC Rs. 10
lakhs + Penalty under CE rules 26 Rs. 5 lakhs
Pre deposit = 15 lakhs x 7.5% = Rs.1,12,5000/- Both
penalty to be added for redeposit
10% of the duty where only duty or both duty and
penalty are in dispute
OR
10% of the penalty where only penalty is in dispute
The amount of pre-deposit shall not exceed `Rs.10 crores.
Example same as above given in the first appeal but if
the order issued by Commissioner appeals rate of pre
deposit is 10% in case of second appeal
Pre-deposit of 7.5%/10% would exclude interest, if any, payable on the duty demanded.
Duty demanded shall include the following
Adjudication order amount as per sec 11
Duty collected amount to be deposited u/s
11D
xxxxxxxx
xxxxxxxx
erroneous CENVAT credit taken
xxxxxxxx
Amount payable under Rule 11D
xxxxxxxx
Total amount
xxxxxxxx
All the above provisions will also applicable to service tax also Parallel amendments have been
made in the Customs Act, 1962 in section 129E.
All pending appeals/stay applications filed prior to 06.08.2014 (the date of enactment of the
Finance (No. 2) Bill, 2014) shall be governed by the erstwhile old provisions.
Payments made during investigation
Payment made during the course of investigation or audit, prior to the date on which appeal
is filed, to the extent of 7.5% or 10% (subject to a limit of ` 10 crore), will be considered as
payments towards pre-deposit for filing the appeals.
Date of filing of appeal will be deemed to be the date of deposit of such payments.
Refund of Pre-Deposit
Refund of pre-deposit is not refund of duty and hence the same will not be governed by
provisions of section 11B of Central Excise Act/section 27 of Customs Act, 1962. Therefore,
once the appeal is decided in favour of the assessee, he can apply for refund of pre-deposit.
Refund of pre-deposit along with interest will have to be made within 15 days of receipt
of the letter of the appellant seeking refund, irrespective of whether order of the appellate
authority is proposed to be challenged by the Department or not.
Refund of pre-deposit should not be withheld on the ground that Department is proposing
to file an appeal or has filed an appeal against the order granting relief to the party.
In the event of a remand, refund of the pre-deposit shall be payable along with interest.
Interest on delayed refund of amount deposited under section 35FR from 06.08.2014
Payment of interest on the refund of such pre-deposit from the date of its payment
to the date of refund. Also, the rate of interest would be 6% p.a.
Interest on delayed refund of pre-deposit made prior to 06.08.2014, the old provision
interest @6%p.a after three months from the date of communication of the order
will apply
Parallel amendments
All the above provisions will also applicable to service tax sec 83/ Customs, Sec 129
CustomsDutyliabilitySec12
Sec12of customs p r o v i d e s c u s t o m s d u t y shall be levied at such ratesspecifiedinCustomsTariffAct,
1975,oranyotherlawforthetimebeinginforce,on goods
intoand exported fromIndia.Duty
payableongoodsimportedbygovernmentalso.
IndiaincludesterritorialwatersofIndia.Consequently,evenaninnocententryofavesselintotheterritorial
watersofIndiawouldresultinimportofgoods.Itwasimpossibletodeterminewhenexactlythevesselcrossed
theterritorialwaterslimitHencetaxableeventwassettledasbelow
TaxableeventforImportgoods
ExampleGoodsimportedfromUSAPorttoChennaiport
12nauticalmiles
Territorialwaters
USAPort
Originationport
Chennaiport
Destinationport
GardenSilk Millsv. UOI1999

(113)E.L.T. 358
Vessellies
Outside
Territorialwaters
Noimporttakes
place
Vesselreaches
Vesselreachesandcrosses
Territorialwaters
Chennaiportand
customsbarriers.
Importofgoodscommences
Importcomplete
Goodsbecomepart
ofcountry.
Dutyliabilityincaseofwarehousegoods
Kiran
Millsv.
Customs 1999(113)E.L.T. 753
In case of warehoused goods, the goods continue to be in
customs bond
Importtakesplacewhenthegoodsareclearedfromthe
warehouse.
Dutypayableatthetimeofremovalfromwarehouseforhome
comsuption.
of
Importerfilesbillof
entryforhome
consumption
Importdutyliability
willattract.
TaxableeventforExportgoods
Chennaiport
Originationport
Vessellies
AtChennaiPort
Customsbarriers
Noexport
ExampleGoodsExportedfromChenaiPorttoUSAport
12nauticalmiles
Territorialwaters
Vesselisatterritorialwaters
exportCommence
USAPort
Destination
port
VesselCrossesterritorialwaters
exportComplete
Dutyliabilityattract.
Eligibleforexportbenefits.
CustomsValuation1
Tariffvalueisoverridingoftransactionvalue.Iftariffvaluesfixed,valueshouldbeaspertariffvalue
TransactionvalueValuationImportedgoods
Transactionvalueofimportedgoodsread
withValuationrules
CostandservicestoaddRule10(1)
(a)(i)Commission&BrokeragePaidin
India
(ii)CostofContainers;
(iii)CostofPacking(LabourorMaterial).
(b)ValueofAssists[4Types]Placeoforigin
IndiaorOutsideIndia
i)Materials/Components/Partscontained
inFP
ii)Tools/Moulds/Dies/SimilarItems:
iii)Materialsconsumedinproductionof
importedgoods:
iv)Eng./Development/ArtWork/Design
Work/Plans&Sketches(PlaceofOrigin:
MustbeOutsideIndia):
(c)Royalties&LicenseFeesinconnection
withsaleexceptChargesforRightof
ReproductionofImportedGoodsinIndia
(d)SubsequentSaleProceedsaccruingto
theseller[ButDividendPaymentsNot
Includible(sincepaymentofdividendcante
equatedwithaccrualofsaleproceeds
subsequently)]
(e)AllOtherPaymentsmadebybuyer
Paymentismadeasaconditionfor
saleofimportedgoods;&
Payment is made by buyer to the
seller directly or to a third party to
satisfyanobligationofseller
Rule10:Transactionvalue=Priceofgoodssoldatthetime
andplaceofimportation+costsandservices,assists(Ie
CIFValueAllcostsuptodestinationport)
Rule3:TVwillbeacceptedonly
1.Norestrictionsonuseofgoods(exceptlaw,geographical
userestrictions)Restrictionswhichdonotaffectvalueof
goods.
2.Priceisnotsubjecttoconditionwherepricecannot
determine.
3.Buyerandsellernotrelatedtoeachohter
TVincaseofrelativeisacceptedif(i)relationshipdoes
notinfluenceprice(ii)ImporterdemonstratesPriceis
closeapproximationtoidentical/similargoods/deductive
value/computedvalue
Rule12:Whenproperofficerhasdoubtabouttruthand
accuracyofTV,hecanaskinformation,stilldoubtcan
rejectTVbygivingopportunity
CostandservicestoaddRule10(2)
(a)CostofTransport;
Actualamount.Ifnotascertainable20%ofFOB
IncaseofAir,Actualrestrictedto20%ofFOB
(b)TransitInsurance;
Actualamount,ifNotascertainable1.125%ofFOB
(c)LandingChargesflat1%ofCIF
(d)demurragecharges
Costandservicestoexcludenottoadd(postimportationcosts)
(a).ChargesforConstruction,Erection,Assembly,Maintenanceor
Technicalassistance,
Undertakenafterimportation
(b)Thecostoftransportafterimportation
(c)DutiesandtaxesinIndia
(d)InterestonDelayedPayments
CustomsValuation2
Iftransactionvlaueisnotdeterminableunderrule3,thevalueshallbedetermined
asperfollowingrulesinorder
TransactionvalueofIdenticalgoodsRule4
identical goods :Goods should be the same in all respects,

including physical characteristics, quality and reputation,
except for minor differences in appearance which do not
affectvalue.Importfromsamecountry/samemanufacturer
orBrandname.reputationiscomparable
AV=transactionvalueofIdenticalgoods+CostandServicesasperRule10
TransactionvalueofsimilargoodsRule5
Similar goods :Identical goods may have all characteristics

but not like the same in all respects, they Perform same
functionandcommerciallyinterchangeable
AV=transactionvalueofSimilargoods+CostandServicesasperRule
10
DeductiveValuemethodRule7
DeductiveValuemeansSalePriceofIdentical/Similargoods
lessDeductionsforgeneralexp.,postimportcostsandlocal
taxes
AV=Deductivevalue
ComputedValuemethodRule8
ResidualValuemethodRule9
1.Theyare
Officer/Directorineachothers
business
LegallyRecognizedpartner
Employer&Employee;
Membersofsamefamily;
Costofproductionofimportedgoods+Profit+Costand
servicesasperrule10
AViscalculatedwiththedataavailableinIndiaforimported
goodswithreasonablemeans
MeaningofrelativeRule2(2)
2.Bothofthem
Arecontrolledbyathird
person;
Controlathirdperson;
ONEOFTHEM
Controltheother
3.Anyperson
Owns/controls5%or
moreofvotingpower/
sharesinbothofthem;
Explanation:
1.Personincludelegalperson
2.SoleDistributor/SoleSellingAgentshallnotbetreatedasRPunlesstheyfallunderanyoftheabovecriteria
CustomsValuation3
TransactionvalueValuationExportgoods
TransactionvalueofExportgoods
:Transactionvalue=Priceofgoodssoldatthetimeand
placeofExportation(IeFOBValue)Allcostsupto
originationport
TVincaseofrelativeisacceptedif(i)relationshipdoes
notinfluenceprice
Rule8:Whenproperofficerhasdoubtabouttruthand
accuracyofTV,hecanaskinformation,stilldoubtcan
rejectTVbygivingopportunity
Iftransactionvlaueisnotdeterminableunderrule3,thevalueshallbedetermined
asperfollowingrulesinorder
Transactionvalueofgoodsofkindand
Quality(DeterminationofExportValueby
ComparisonRule4
Goods of kindandQualitysimilartothatIdentical goods/

similargoods
AV=transactionvalueofgoodsofkindandQuality
ComputedValuemethodRule5
ResidualValuemethodRule9
AV=Costofproductionofexportgoods+Designcharges+
Profit
AViscalculatedwiththedataavailableinIndiaforexport
goodswithreasonablemeans
RelevantdateforImportedGoods
B/EforH/Cfiledu/s46
Sec15(1)
Relevant
date
Sec15
DateoffilingofsuchB/E
B/EforH/Cfiledu/s68
(clearancefrom
WH)
DateoffilingofsuchB/E
Othercases(smuggled
goods)
Baggage
DateofPaymentof
duty
DateoffilingofDeclaration
ofContentsSec78
Sec15(2)
DateofpresentationofParcel
ListtothePO
However, if post arrived by
post & PO has presented an
Advance Parcel List, then
relevant date would be the
dateofarrivalofvessel
Sec83(1)
Post
Note:Sec46(3)permitsfilingofAdvanceB/E(B/Efiledbeforefiling
ofIGM/IR)\
WhereAdvanceB/Eisfiledincaseof
VesselRelevantdate=DateofgrantofentryInwardtosuchvessel
AIRCRAFTRelevantdate=DateofarrivalofAircraftintoIndia
VEHICLERelevantdate=DateofpresentationofB/E[ProvisoisNot
Applicabletosuchsituation)
RelevantdateforExportGoods
Shipping bill/Bill of
exportisfiled
DateofLetexport
order
Sec
16(1)
Relevant
date
Sec15
OtherCases(Smuggled
goods)
Baggage
DateofPaymentof
duty
DateoffilingofDeclarationof
ContentsSec 78
Sec
16(2)
Post
DateofPostalgoodstothePO
Sec83(2)
WAREHOUSINGOFIMPORTEDGOODS
WAREHOUSINGOFIMPORTEDGOODS
PublicWarehouse
Sec2(44):Warehousemeans:
sec57
APublicWarehouseasappointed
u/s57;or
Aprivatewarehouseaslicensed
u/s58
Private
Warehousesec58
AlsoKnownasCustomsWarehouseorBondedWarehouse
Orwarehousingstation
OnlyDUTIABLEGOODScanbestoredinCustomsWarehouse
DUTIABLEGOODS[Sec2(14)]:Anygoodswhicharechargeabletoduty&
onwhichdutyhasnotbeenpaid.
AppointedbyAC/DC
LicensedbyAC/Dsec58(1)
Sec58(2)
Licensemaybecancelled:
i)ByGivingOnemonthNotice
ii)IncaseofcontraventionofAct/Rules
(OpportunityofBeingHeardshall,
however,begranted)
Sec58(3)
PendingCancellation:Licensemaybe
suspended
WAREHOUSINGProcedure
Billofentry
ForWarehousingsec
46
Ownersright
incaseof
warehouse
goodssec64
WareHousing
Bond
Sec59
Paymentofrent
andothercharges
Sec63
Assessment&
Warehousing
Ordersec60
Warehouse
GoodsUndercontrol
ofProperOfficersec
Sec.62
Warehouse
goods
Warehousing
periodSec61
WAREHOUSINGWITHOUTWAREHOUSING
Manufacturing
operationsincase
ofwarehousegoods
sec65
If the goods reached the warehouse, without following ALL or ANY of the following
conditions, then it is calledWAREHOUSINGWITHOUTWAREHOUSING
(I)ProvisotoSec46(1):InabilityofimportertofileanyB/E(whetherforH/CorforW/Hing)due
to nonavailability of full information Goods may be allowed to deposited in PUBLIC
Warehouse
ii)Sec49:B/EforH/Cfiledbyimporterinabilitytoclearthegoodswithinareasonabletime
GoodsmaybeallowedtobedepositedinWarehouse(PublicW/HorPrivateW/H)(Suchgoods
maybedutiableornondutiable)
iii) Sec 85: B/E filed for Warehousing Importer submitting a declaration that these are to be
supplied as Stores without payment of duty (i.e., to Foreign Going Vessel/Aircraft or Ship of
Indian Navy) such stores may be warehoused without assessment of duty thereon (i.e., No
BondExecution).
.
WAREHOUSINGOFIMPORTEDGOODS2
RemovalofgoodsFromWarehouse
Transferto
AnotherWHsec67
Goodsnottobe
removedfromWH
Exceptasfollows
Sec71
ClearanceForHC
sec68
Sec 15 (1) (b) :Relevant date for
determination of Rate = Date of
filingofB/EforHCu/s68
ClearanceFor
ExportSec69
ClearanceFor
Samples
Permissionofproperofficer
Conditions(transitbondwithguarantee,
goodsdulyarrivetoanotherWarehouse
i)B/EforHC(GreenColor)hasbeenfiled
ii)ImportDuty+Rent+OtherCharges+
Interest+penaltieshavebeenpaid
iii)ClearanceorderhasbeenissuedbyPO
Proviso;relinquishmentoftitlerefer*
i)ShippingBill/BillofExporthasbeenfiled
ii)ExportDuty(ifany)+Rent+OtherCharges
+Interest+penaltieshavebeenpaid
iii)ClearanceorderhasbeenissuedbyPO
Goodslikelytosmuggledbackrefer**
Withpaymentofduty.
Withoutpaymentofdutywithpermission
ofproperofficer
*RelinquishmentoftitlebyownerofwarehousegoodsProviso:tosec68
ImportermayrelinquishhistitletogoodsBeforepassingofClearanceOrderfor
Homeconsumption
Then, he shall not be liable to pay DUTY.. Title may be relinquished only upon
paymentofwarehousingduessuchasRent,interest,penaltyandothercharges,)
InrespectofanygoodswhereoffencehasbeencommittedundercustomsActor
anyotherlaw,relinquishmentcannotbemade.
** GoodslikelytobesmuggledbackintoIndiasec68(2)
In case of Goods likely to be smuggled back into India CG may by Notification in official
gazettedirectthat:
Clearancewithoutdutypaymentnotpermissible
Clearance is permissible only subject to fulfillment of specified conditions or
restrictions
Allowanceincaseofvolatilegoods[Section70]
Ifanywarehousedgoodsatthetimeofdeliveryfromawarehousearefoundtobedeficientinquantityon
accountofnaturalloss,theAC/DCmayremitthedutyonsuchdeficiency.
ThissectionappliestosuchwarehousedgoodsasnotifiedbytheCentralGovernment,havingregardtothe
volatilityofthegoodsandthemanneroftheirstorage.
DutyDrawback
Dutydrawbackmeansrefundofcustomsduty,andexcisedutypaidoninputs/materialtoexporteronexport
Typesofduty
drawback
Drawbacku/s74
Dutypaidimportedgoodsexportedagain
Drawbacku/s75
Dutypaidimportedinputs/Local
inputs/servicetaxpaidinputservice
Usedinmanufactureof
Finalproduct/providingservice
Dutydrawbacku/ssec.74
BCD&CVD
Paid
ImportofGoods
Proportionate
Reductionof%ofrefundincase
ofdelayinexport
Twotypesofrates
1.Ratesforbusinessgoods
2.Ratesforpersonalgoods
Dutydrawbacku/ssec.75
Refundofduty
Upto98%of
Actualpaid
Excisedutypaid
Useofinputservice
Servicetaxpaid
Ratesofdrawback
AllIndustryrate
=%onFOBValue
NotifiedbyCBEC
AC/DCis
Satisified
BCD&CVD
Paid
Importofrawmaterial/
Packingmaterial
Localpurchaseofraw
material/Packingmaterial
Samegoodsis
Exportedassuch
Within2years
IfAIRnotfixed
foranyproduct
Usedin
manufacture
final
product/
taxable
service
Product/
Service
Exported
Refundof
BCD/CVD/
Exciseduty/
Servicetax
At
AllIndustry
rate
at%on
FOBvalue
IfAIRistoolow
SpecialBrandrate
Comparedto
Brandratefixedby
fixedby
Actualdutypaid
Commissioner.
Commissioner.
Exporterhastosubmit
Exporterhasto
informationandrequest ie.,AIR<80%
submitinformation
dutypaid
andrequest
Comparison between Excise, Customs and Service

Tax
Certain provisions in the Central Excise, Customs and Service Tax are similar. However, these similar
provisions were not elaborated in the Customs and Service Tax. The comparison is given as under:
Comparison of classification under excise, customs and service tax

Factor of
comparison
Excise
Customs
Classification
rules
Rules under CETA,

1985
Rule 1 to 6
Rules 1 to 6 of the CTA.

Same as excise
Tariff headings
HSN, tariff nos.
Similar in excise and Similar in excise and

customs. Eg:
customs. Eg: Chapter 39
Chapter 39 - Plastics Plastics
Service tax
With the introduction of negative list, replacing
taxable services, the question of classification
does not arise. However, interpretation provides
1. reference to main service does not include
reference to auxiliary service.
2. Prefer specific definition, than general
definition
3. Classification of bundled services
N/A
Comparison of valuation under excise and customs

Factor of
comparison
Tariff valuation
Excise
Section 3(2), provisions similar to customs
Customs
Section 14(2), provisions similar to excise
MRP,
Annual Sections 4A and 3A and Rule 15
Capacity
Production,
Compound
levy
scheme
No such valuations in customs. MRP Valuation

will be considered for CVD payment.
Transaction value
Section 14(1) and Valuation rules

1.
Price of goods sold at the time and place
of Importation/exportation
2.
Buyer and seller not related to each other
[Meaning of Relative - 8 persons are listed,
For example Employee-, Employer,
director, 5% holding etc. (these persons
are not relatives under excise)]
3.
Price is sole consideration for sale
Section 4
1.
Price of goods sold at the time and place of
removal
2.
Buyer and seller not related to each other
(Meaning of Relative - 4 persons are listed Mutual interest, holding and subsidiary,
Relative under Companies Act, relative who
is distributor)
3.
Price is sole consideration for sale
Inclusions
and More or less same. For example, Packing, design, More or less same. For example, Packing,
exclusions
in etc., Installation, discount, local taxes
design, etc., Installation, discount, local taxes
Transaction value
Valuation Rules
Applicable when value cannot be determined Transaction value determined as

under transaction value - Section 4
Section 14(1) read with valuation rules.
per
Comparison of demand, recovery of duty and tax in case of excise, customs and service
tax
Factor of
comparison
Excise
Customs
Service tax
Demand
Section 11A: Not levied, Not Section 28: Not levied, Not paid, Section 73 of the Finance
paid, Short Levied, Short paid, Short
Levied,
Short
paid, Act (FA), 1994; Similar to
Erroneously Refunded
Erroneously Refunded
Section 11A of the CE Act
(instead of duty, it is tax)
Relevant
Date
1.
2.
3.
4.
5.
Return filed: Date of filing

Return not filed: due date of
Filing
Provisional
assessment:
date of Final assessment.
Erroneous refund: Date of
refund
Other cases: Date of
payment
Non-levy: Date of clearance order

Same as under
Short-levy: Date of payment
Excise
Provisional assessment: Date of
Final assessment.
Erroneous refund: Date of refund
Other cases: Date of payment
Time Limit
Normal - 1 year Extended (Fraud

cases) - 5 years, in case of fraud,
collusion, wilful misstatement,
suppression of facts, violation of
law with intention to evade duty,
Normal 1 year Extended - 5 years,

in case of fraud, collusion, wilful
misstatement, suppression of facts,
violation of law with intention to
evade duty,
Levy of interest
on recovered
duty/tax)
Section 11AA (@18% p.a.)

From the first day after due date.
Section 28AA (@18% p.a.)

Section 75 Slab system 18%
From 1st day of the month to 30% For small service
succeeding the month in which providers up to taxable
duty was ought to be paid.
value of Rs. 60 lakhs in last
financial year concession
by 3%
Penalty in fraud
cases
(similar
provisions in all 3
Acts)
Section 11AC
Section 114A
Section 78
Deposit Amount
collected in excess
from buyer
/customer
(similar
provisions in all 3
Acts)
Section 11D
Section 28B
Section 73A
Interest leviable
on amount
collected in excess
Section 11DD (@18% p.a.)
No Corresponding provision
Section 73B
Similar to excise
Normal-18 months
Extended Same as under
Excise
If Extended period notice is
sustainable in appeal, the
notice is treated as notice
for normal period.(FA
2013)
Factor of
comparison
Provisional
attachment of
property
(similar
provisions in all 3
Acts)
Excise
Section 11DDA
Customs
Section 28BA. Applicable for the
new section 28 AAA also
Service tax
Section 73C
Factor of
comparison
Excise
Customs
Section 135B, 154B
Service tax
Publication of
names of persons
Section 9B, Section 37E
Section 73D
Recovery of
amount due to
government
Section 11
Section 142
1.
Adjustment in Refund
Similar to excise
2.
Attachment of movable/
immovable property
3.
Recovery by issuing a
Certificate to the collector
4.
Recovery from successor
Section 87
Same as excise
Power to Grant
exemption in
public Interest
(similar
provisions in all 3
Acts)
Section 5A
Section 25
Section 93
Liability under
the Act - first
Charge
(similar
provisions in all 3
Acts)
Section 11E
Section 142A
Section 88
Comparison of refunds under excise, customs and service tax

Factor of
comparison
Refund
Excise
Customs
Service tax
Section 11B
Time limit: 1 Year from
Relevant date
Exceptions to Doctrine of
Unjust Enrichment:
(a) Rebate on export of
goods
(b) Refund of CENVAT
Credit;
(c) Unspent balance of
PLA;
(d) ED paid and borne
by manufacturer;
(Cum-duty price)
(e) ED paid and borne
by buyer
(f) ED paid and borne
by notified persons
Section 27
Time limit: 1 year from the date of payment of
duty or interest.
Exceptions to Doctrine of Unjust Enrichment:
(a) Duty Drawback on export of goods;
(b) Customs duty (CD) to be paid and borne
by importer/exporter;
(c) CD paid and borne by buyer
(d) CD paid and borne by notified persons
(e) CD paid on imports made by an
individual for his personal use
(f) Refund of Export duty on re-import of
goods (in situations covered under
section 26);
Section 83 of the FA,

1994
provides
that
section 11B of the CE
Act will apply
Section 27A

1994 provides that
section 11BB of the CE
Act will apply
Interest on delayed Section 11BB

refund
Factor of
comparison
Excise
Customs
Service tax
ED/ST to be shown Section 12A

separately
on
invoice
Section 28C (Though provision says, Customs Section 83 of the FA,

duty will not be shown and charged in invoice 1994 provides that
like excise, service tax).
section 12A of the CE
Act will apply
Presumption that Section 12B

duty
burden
passed
on
Consumer
Section 28D

1994 provides that
section 12B of the CE
Act will apply
Comparison of administration and appeals under excise, customs and service tax
Factor of
comparison
Excise
Customs
Administration
Hierarchy
CBEC,
Principal
Chief CBEC to DC/AC; same as excise
Excise
Dept.
will
Commissioner,, to Inspector
No Superintendent/Inspector administer service tax
Appraiser/Examiner instead
(Such other class of officer as appointed
for the purpose of the Customs Act)
Appeal
Hierarchy
CESTAT and
(Appeals)
Commissioner CESTAT and Commissioner (Appeals)
Service tax
CESTAT
and
Commissioner (Appeals)
Appeal
to Sections 35 and 35A
Commissioner
Forms EA-1 and EA-2 (Dept)
(Appeals)
Sections 128 and 128A

Forms CA-1 and CA-2 (Dept)
Section 85
Form ST-4
Appeals
CESTAT
Sections 129A, 129B and 129C

Form CA-3, CA-4, CA-5
Exceptions:
Order of
1.
Duty drawback
2.
Baggage
3.
Short landing of goods
In above 3 cases
Revisionary Application to be made to
the Central Govt. sec 129 DD in Form
CA-8
Section 86
Form ST-5, ST-6, ST-7
Exceptions:
No corresponding
provision.
Sec 129F similar
Central excise sec 35 F is

applicable
to Sections 35B, 35C and 35D

Form EA-3, EA-4, EA-5
Exceptions:
Order of
1.
Goods lost in transit
2.
Rebate on exports
3.
Export of goods without
payment of duty
4.
Admissibility of CENVAT
credit
Revisionary Application to be
made to the Central Govt. Sec
35 EE - Form EA-8
Pre-deposit of Sec 35 F
duty in appeal
Power of CBEC Sec 35 R
to
issue
instructions
Appeal to High Sec 35 G to K
court
Central excise sec 35 R is

applicable
Sec 130 to 130 D
Similar
Central excise provisions

Applicable
Factor of
comparison
Excise
Appeal
to Sec 35 K, 35 M
Supreme court
Customs
Service tax
Sec 130 E
Similar
Central excise provisions

Applicable
Comparison on settlement commission

Factor of comparison
Excise
Customs
Service tax
Person who can make Manufacturer/Registered person of a Importer/Exporter, any other person Person liable to
application
private warehouse
may in respect of a case
pay service tax
Case
Section 31
Case means pending adjudication
proceedings before CEO on the date of
application
When a tribunal, court, or any authority
sends back proceedings to Adjudicating
authority it is not a case
Conditions
for Section 32E
admissibility
of (a) Applicant has filed returns showing
settlement application
production, clearance and duty
paid; Exception available
(b) SCN for recovery of duty has been
issued by CEO;
(c) Additional ED accepted by the
applicant in his application should
exceed Rs. 3,00,000.
(d) Additional ED accepted has been
deposited along with interest
@18%;
(e) Question involved is not to be
related to Classification of Goods;
(f) When the case is pending before
tribunal/court - Application will
not be accepted
(g) Where seizure operation has been
carried
out
and
Excisable
Goods/Books of Accounts/ other
documents have been seized Settlement Application shall be
admissible only when made after
expiry of 180 days of seizure
Section 127A
Similar to excise
Wherever CEO
officer.
Settlement
Proper Commission
provisions
of
Central excise is
applicable
to
Service tax
Where the word
Section 127B
duty the word
(a) Applicant has filed Bill of Entry /
tax & where the
Shipping Bill
word goods, the
word service has
(b) to (g) similar to excise
to substitute.
Wherever excise, substitute Customs
duty
Additional point:
No settlement is possible in relation to:
Section 123 Goods (smuggled goods)
Goods in relation to which offence
under NDPS (Narcotics, Drugs and
Psychotropic Substances) Act has been
committed
substitute
Procedure
after Section 32F
receipt of application
(similar provisions in
both the acts)
Section 127C
Similar to Excise
Powers of settlement Sections 32G to 32L

commission
both the acts)
Sections 127D to 127I

Similar to Excise
Order of settlement
Section 127J
Similar to Excise
Section 32M
Factor of comparison
Excise
Customs
Service tax
both the acts)
Comparison on Authority for Advance Ruling

Factor
of
comparison
Activity
Applicant
Similar
provisions
Excise
Customs
Service tax
Section 23A
Activity means production or
manufacture of goods. and
includes any new business of
Production
or
manufacture
proposed to be undertaken by the
existing producer or manufacturer
Section 28E
Activity means Import or Export
and includes any new business of
import or export proposed to be
undertaken by the existing importer
or exporter
Section 96A
Activity not defined, it
usually means providing of
service.
Similar
Similar
Section 28H
Eligible issues on which Advance
Ruling can be sought:
(a) to (d) & (f) similar
(e) not applicable
Substitute Customs duty for excise
duty/
Service tax for Service
Section 96C
Eligible issues on which
Advance Ruling can be
sought:
(a) to (f) similar
Substitute service for goods/
Service tax for Service.
i.
ii.
iii.
iv.
v.
vi.
Nonresident setup Jv
with resident/non
resident
Resident setup Jv with
Nonresident
Indian subsidiary of
foreign holding
Company
Indian public sector
company
Private limited Co.
Application for Section 23C

Advance
Eligible issues on which
Ruling
Advance Ruling can be sought:
a) Valuation of goods;
b) Classification of goods;
c) Applicability of
Exemption notification;
d) Applicability of Other
Notifications;
e) Admissibility of
CENVAT Credit Of
excise duty and service
tax
f) Determination of
liability to pay ED
Procedure on
receipt
of
application
Section 23D
Similar
Section 28I
Similar
Section 96D
Similar
Applicability of
Advance
Ruling
Section 23E
Similar
Section 28J
Similar
Section 96E
Similar
Advance
Ruling to
Section 23F
Similar
Section 28K
Similar
Section 96F
Similar
be
Factor
of
comparison
Excise
Customs
Service tax
void in certain
circumstances
Provisions of Central Excise Act, 1944 applicable to Service Tax

As per section 83 of the Finance Act, 1994, provisions of the following sections of the Central Excise Act,
1944 have been made applicable to service tax:
Excise
section no.
Contents of the section
Parallel section no.

in Customs
Sec 5A
Exemption notification scope of applicability from 06.08.2014
9A(2)
Certain offences to be non-cognizable.
9AA
Offences by companies.
9B
Power of Court to publish name/ place of business, etc., of persons convicted
9B
9C
Presumption of culpable mental state
138A
9D
Relevancy of statements under certain circumstances
138B
9E
Application of section 562 of the Code of Criminal Procedure, 1898
9E
11B
Claim for refund of duty
27
11BB
Interest on delayed refunds
27A
11C
Power not to recover duty of excise not levied or short levied as a result of general 28A
practice
12
Application of the provisions of Act No. 52 of 1962 to Central Excise Duties
N.A.
12A
Price of goods to indicate the amount of duty paid thereon
28C
12B
Presumption that the incidence of duty has been passed on to the buyer
28D
12C
Consumer Welfare Fund
2(21A)
adopting
definition in CE
12D
Utilisation of the Fund
N.A.
12E
Powers of Central Excise Officers
14
Power to summon persons to give evidence and produce documents in inquiries 108
under this Act
15
Officers required to assist Central Excise Officers
151
15 A and 15
Annual return with specific information and penalty from 06.08.2014
B
31,32, 32A to
Settlement commission provisions
32P
33A
Adjudication procedure
122A
35F
Deposit, pending appeals, of duty demanded or penalty levied
129E
35FF
Interest on refund of pre-deposit if delayed beyond three months [section inserted 129EE
vide Finance Act, 2008]
Excise
section no.
Contents of the section
Parallel section no.

in Customs
35G
Appeal to High Court
130
35H
Application to High Court
130A
35I
Power of High Court or Supreme Court to require statement to be amended
130B
35J
Case before High Court to be heard by not less than two judges
130C
35K
Decision of High Court or Supreme Court on the case stated
130D
35L
Appeal to the Supreme Court
130E
35M
Hearing before Supreme Court
130F
35N
Sums due to be paid notwithstanding reference, etc.
131
35O
Exclusion of time taken for copy
131A
35Q
Appearance by authorised representative
146A
35R
Appeal not to be filed in certain cases
35R
36
Definitions Appellate tribunal
131C
36A
Presumption as to documents in certain cases
139(i)
36B
Admissibility of micro-films, facsimile copies of documents and computer print 138C

outs as documents and as evidence
37A
Delegation of Power
152
37B
Instructions to Central Excise Officers
151A
37C
Service of decisions, orders, summons, etc.
153
37D
Rounding off of duty, etc.
154A
38A
Savings clause Amendments in law
159A
40
Protection of action taken under the Act
155

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Indirect taxes

Service Tax - Basics 1

Activity for consideration From one person to other

Work done, deed done, Act

1. Existence of two parties is must(SP & SR)

Activity Without Consideration

Total 9 Services Specified:

Sale of goods/ immovable property)/

Service Tax Charging Section

When Change in rate, rate to be

No Levy on Negative list services(17

Taxable territory= India excluding J

ST- Interpretation /Classification- Sec 66 F

Exemption to main service does

When service capable of

When there is no Specific

Ex. When transport of goods

Ex. When Hotel Provides

Not in the Ordinary

Classify as Service which gives highest

individuals such as selectors,

Participation in a sporting Exempt

1. (i) In a residential complex, monthly

3. If a RWA provides certain services such as

Health Care services

Plastic/Cosmetic Surgery when undertaken to restore or to reconstruct anatomy or

Not covered (taxable)

Renting of precincts of a religious place or conduct of any religious ceremony

Training or coaching in recreational activities

Services by way of training or coaching in recreational activities relating to arts, culture or

Such coaching relating to arts, culture or sports.

Temporary transfer or permitting the use or enjoyment of a copyright

Services by a performing artist in folk or classical art forms

Artist of folk music, folk dance and

Performance in folk music, folk

Artist of Classical music, Classical

Performance in Classical music,

Above (1) and (2) as a brand

Performance in above(1) and (2)

Artist of Western music, mimicry,

Artists of cinema, television

Artists of Painting, sculpture

Services of private coaching

Negative list of Services

Selling of space for advertisements in print media

Service of ad agencies is taxable. Commission received by ad agents is taxable. Canvas

location where the servicesareactually

In case of services provided directly in relation toan

Place where the immovable property is

Where the location of the service provider well as

location in the taxable territory where the

location of the serviceprovider

Incaseofservicesprovidedonboardaconveyance the first scheduled point of departure of

In orderto preventdoubletaxationor nontaxationof the provisionof a service,orfor the uniform

(ii) Where the services are provided from/used at a Thelocationofsuchestablishment

(iii) Where services are provided from/used at more Theestablishmentmostdirectly

1. Services of insurance agent

Insurance Company/Any other person

Service tax liability

Service tax liability

2. Services of Goods Transport Agency (GTA)

Consignor or consignee who is (a) factory, society, registered dealer of excisable

Service tax liability

Service tax liability