Sub: Central Excise - Realisation of the amount paid under the provision of the erstwhile sub-rule (1) of rule 57CC and its retention by the manufacturers - whether the provisions of section 11D of Central Excise Act, 1944 would get attracted in such case

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Copy of the Board's Circular No. 599/36/2001.CX (F.No. 267/77/2000-CX.8) dated 12^th November, 2001 on the above subject is communicated for information and necessary action.

The contents of the Trade Notice may please be brought to the notice of all concerned.

(Issued from file C.No. IV/16/2/2001.CX. POL.)

Sd/-

(JANAKI ARUNKUMAR)

ADDITIONAL COMMISSIONER (TECHNICAL)

To

As per mailing list (For both Department and Trade)

I am directed to say that erstwhile rule 57CC(1) of the Central Excise Rules, 1944 provides for payment of an amount equal to 8% of the total price (excluding sales tax etc. paid on such goods) of the exempted final product by the manufacturers who manufacture both dutiable and exempted final products without maintaining a separate account for inputs, on which credit has been availed. It has been reported that certain manufacturers are realising the amount so paid under said Rule 57CC from their buyers by showing it separately in the invoices. Doubts have been expressed as to whether the amount so realised by the manufacturers represents Central Excise duty and whether this amount has to be paid to the credit of Central Government under the provisions of section 11D of Central Excise Act, 1944.

2. The matter has been examined by the Board and it is clarified as under:

 

1. Rule 57CC does not envisage the amount would be separately realised from the buyer since it is to be calculated on the total price charged to the buyer.

 

2. When the 8% amount is shown separately on invoice as an amount (not as excise duty) Section 11D would not get attracted. In that case the amount of 8% would have to be claculated on the total price charged from the buyer.

 

3. In case of amount of 8% or for that matter any amount representing an excise duty is recovered from buyer Section 11D gets attracte. This is a matter of fact to be ascertained on the basis of documents.

Yours faithfully,

Sd/-

(Vivek Prasad)

Under Secretary to the Government of India