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Central Excise

Requirement of filing declaration for the manufacturers exempt from registration.

Where the goods are chargeable to nil rate of duty or where the exemption from whole of the duty of excise leviable thereon is granted on the basis of:

  • value of goods; or
  • process of manufacture of goods; or
  • quantity of clearances of goods made in a financial year; or
  • payment of appropriate duty of excise in respect of the raw material used in the manufacture of the goods; or
  • conditions, if any, specified in the schedule to the Central Excise Tariff Act, 1985 in respect of such goods; or
  • Conditions, if any, specified in any exemption notification,

the manufacturer will have to file a declaration in the prescribed proforma with the jurisdictional Assistant Commissioner before 15th of April every year.

In case of exemption based on value of clearances in a financial year, only those assesees whose value of clearances in previous financial year or in current financial year has exceeded Rs. 40 lakhs , or is likely to exceed Rs. 40 lakhs , are required to file a declaration before 15th April with jurisdictional Assistant Commissioner.

ECC code number and its utility.

ECC code is known as Electronic Computer Code and is allotted to all registrants of Central Excise. This code comprises of 10 digits. The first 2 digits represent the Commissionerate , next 2 digits represent the division, next 2 digits represent the range, the 7th digit indicates the sector, 8th & 9th digit represent the unit within the sector and the last digit is a check digit. The ECC code number facilitates proper account of Assessee's records. This code number is a mandatory requirement and is given to the registrant by the Pay and Accounts officer. But the application in this regard is to be submitted to the jurisdictional Range Officer. ECC code number is required to be mentioned on all the statutory documents issued and maintained by the registrant.

Collection of Duty of Excise

With effect from 1st day of April, 2000 every manufacturer shall discharge his duty liability in respect of clearances made during the first fortnight of the month, by the 16th day of that month, and in respect of clearances made during the second fortnight of the month, by the last working day of that month:

Provided that a manufacturer availing the exemption under a Notification based on value of clearances in a Financial Year may discharge his duty liability in respect of clearances made during a calendar month, by 15th day of succeeding month.

How to pay duty.

The assessee can pay duty from two accounts. One account is called current account also described as PLA. The other account is called the Modvat account.

Current account or PLA (Personal ledger account)

After registration of a new factory, the assessee should deposit a token amount on TR-6 challan in any of the nominated branches of Punjab National Bank. T.R. abbreviates Treasury Receipt. After depositing the amount the assessee can take credit of that amount in the PLA to be maintained by him. The assessee , thereafter, should apply to the jurisdictional Range Superintendent along with a receipted copy of TR-6 for allotment of PLA number. The PLA number is allotted by the Chief Accounts Officer and it takes normally a week's time for the allotment of the PLA number. The assessee must mention the PLA number on the TR-6. Even during the pendency of allotment of PLA number the assessee can effect clearances. The duty is to be deposited by the assessee by making a debit entry of the amount of duty in PLA account.

PLA is to be maintained in triplicate using indelible pencil and double side carbon. The assessee should periodically make credit in current account by depositing on TR-6 challans. There should always be sufficient balance in the account to cover the duty on the goods intended to be removed. The debit entry towards payment of duty of an amount exceeding the balance available in the current account means removal of goods without payment of proper duty and such acts are liable to penalties under the law.

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