RULE 57AB. CENVAT credit

(1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of-(i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said First Schedule), leviable under the Act;

(ii) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985, leviable under the Central Excise Act, 1944 in relation to the goods falling under sub-heading Nos. 2401.90, 2404.40, 2404.50,2404.99,5402.20,5402.32,5402.42, 5402.43,5402.52,5402.62, 5703.90, 8415.00, 8702.10, 8703.90, 8706.21, 8706.39 and 8711.20 of the said First Schedule;

(Clause (ii) has been amended vide Ntf.No. 51/2000-Exc. (NT), Dt.29-08-2000)

(iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978);

(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and

(v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); and

(Above Clause (v) has been substituted vide Ntf.No. 23/2001-CE(NT), Dt.11/05/2000)

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(v) the additional duty leviable under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i), (ii), (iii) and (iv) above,paid on any inputs or capital goods received in the factory on or after the first day of April, 2000, including, the said duties paid on any inputs or capital goods used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption contained in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 214/86- Central Excise, dated the 25111 March, 1986, vide GSR No, 547(E) dated the 25th March, 1986, and received by the manufacturer for use in or in relation to the manufacture of final products, on or after the first day of April, 2000.

(Clause (v) had been amended vide Ntf.No. 51/2000-Exc. (NT), Dt.29-08-2000)]
Explanation. -For removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENV AT credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) on goods falling under Chapter heading No. 98.01 of the First Schedule to the said Customs Tariff Act.

(b) The CENV AT credit may be utilised for payment of any duty of excise on any final products manufactured by the manufacturer or for payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed, or such capital goods are removed as such.

Provided that while paying duty in the manner specified under sub-rule (1) of rule 49 or sub-rule (1) of rule 173G, as the case may be, the CENVAT credit shall be utilised only to the extent such credit is available on the fifteenth day of a month for payment of duty relating to the first fortnight of the month, and the last day of a month for payment of duty relating to the second fortnight of the month or in case of a manufacturer availing exemption by notification based on value of clearances in a financial year, for payment of duty relating to the entire month.

(Above para has been added vide Ntf.No. 48/2000-Exc. (NT), Dt.18-08-2000)

(Following proviso has been inserted vide Finance Bill 2003-2004 - Date of effect 01/04/2000)

Provided that the CENVAT credit of the duty paid on the inputs used in the manufacture of final products cleared after availing of the exemption under the notification numbers 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508 (E), dated the 8th July, 1999] and 33/99- Central Excise, dated the 8th July, 1999 [G.S.R. 509 (E), dated the 8th July, 1999], shall be utilized only for payment of duty on final products cleared after availing of the exemption under the said notification numbers 32/99-Central Excise, dated the 8th July, 1999 and 33/99- Central Excise, dated the 8th July, 1999.

Explanation. -When inputs or capital goods are removed from the factory, the manufacturer of the final products shall pay the appropriate duty of excise leviable thereon as if such inputs or capital goods have been manufactured in the said factory, and such removal shall be made under the cover of an invoice prescribed under rule 52A.

(2) Notwithstanding anything contained in sub-rule (1) - (a) credit of duty in respect of inputs or capital goods produced or manufactured- (i) in a free trade zone and used in the manufacture of the final products in any other place in India; or

(ii) by a hundred per cent export-oriented undertaking or by a unit in an Electronic Hardware Technology Park or Software Technology Parks and used in the manufacture of the final products in any place in India, shall be restricted to the extent which is equal to the additional duty leviable on like goods under section 3 of the Customs Tariff Act, 1975 paid on such inputs; (b) credit in respect of- (i) the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978);

(ii) the additional duty of excise under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and

(iii) the additional duty under section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clauses (i) and (ii) above shall be utilised only towards payment of duty of excise leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, or under the said Additional Duties of Excise (Goods of Special Importance) Act, on any final products manufactured by the manufacturer or for payment of such duty on inputs them- selves if such inputs are removed as such or after being partially processed. (c) CENV AT credit of the duty paid on the inputs shall not be allowed in respect of texturised yam (including draw-twisted or draw-wound yam) of polyesters falling under heading No. 54.02 of the said First Schedule, manufactured by an independent texturiser, that is to say, a manufacturer engaged in the manufacture of texturised yam (including draw-twisted or draw-wound yam) of polyesters falling under heading No. 54.02, who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yam of polyesters falling under sub-heading No. 5402.42 of the said First Schedule.

(d) credit, in respect of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) shall be allowed to the extent of thirty rupees per square meter.

(e) credit in respect of-(i)the National Calamity Contingent duty leviable under clause 129 of the Finance Bill, 2001; and

(ii)the additional duty under Section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clause(i) above shall be utilized only towards payment of National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001) on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves if such inputs are removed as such or after being partially processed.

(In clause (e) above bold words has been substituted vide Ntf. No. 23/2001-CE(NT), dt. 11/05/2001)

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(ii)the additional duty under Section 3 of the Customs Tariff Act, 1975, equivalent to the duty of excise specified under clause(i) above shall be utilized only towards payment of National Calamity Contingent duty leviable under clause 129 of the Finance Bill, 2001 on any final products manufactured by the manufacturer or for payment of such duty on inputs themselves if such inputs are removed as such or after being partially processed.

(Above clasue (e) has been inserted vide Ntf. No. 6/2001-CE(N.T.), dt. 01/03/2001)
Explanation. -Where the provisions of any other rule or notification provide for grant of partial or full exemption on condition of non-availability of credit of duty paid on any input or capital goods, the provisions of such other rule or notification shall prevail over the provisions of the rules made under this section.

Note:- Please see Ntf. No. 07/2001-CE(NT), dated 01/03/2001) and Ntf. No. 21/2001-CE(NT), dated 30/04/2001)