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Cancellation of Central Excise Registration - Audit Mandatory?


Clarification given in RAC Meeting

I wish to share my personal views on clarification given in an RAC meeting, as published in DDT dated 18.11.2015.

Clarification:
“Reply: Under the Central Excise Law (Notification No.36/2001-CE (NT) dated 26.06.2001, no Registration is required to be taken by a manufacturer who manufactures excisable goods which are totally exempt from payment of duty under any general Notification and which are chargeable to 'Nil' rate of duty; and up to the threshold limit stipulated under a Notification based on the Value of Clearances (up to Rs.90 lakhs in a financial year).”

Comments:
Threshold limited stipulated under Notification based on value of clearances i.e. Notification No. 8/2003-CE, is Rs.150 lakh (not Rs.90 lakhs) in a financial year. Limit of Rs.90 lakh (Rs.150 lakh - Rs.60 lakh) is prescribed as ‘specified limit’ for non-filing of Declaration (for SSI units) under Notification No. 36/2001-CE (NT) (as amended). Eligible units, who have crossed specified limit of Rs.90 lakh, are required to file Declaration; and before crossing threshold limit of Rs.150 lakh (not Rs.90 lakh) they are required to apply for registration.


Clarification:
“Reply: Explanation attached to Section 2(d) of the Central Excise Act, 1994 (sic) which defines excisable goods, goods includes any article, material or substance which is capable of being brought and sold for a consideration and such goods shall be deemed to be marketable. Therefore, Central Excise duty is being levied and collected on "Coal Ash" arising during the course of manufacture of excisable commodities and sold for a commercial consideration. Further, it appears that the case law cited in this regard has not yet attained a legal finality.”

Comments:
Vide Circular No. 386/19/98-CX dated 7-4-1998, it was clarified that Coal Ash (Cinder) is an excisable commodity classifiable under Heading No. 2621.00 and is chargeable to appropriate rate of duty. However, this Circular has been withdrawn vide Circular No. 822/19/2005-CX dated 18-11-2005 after pronouncement of Apex Court’s Judgement in case of M/s. Ahmedabad Electricity Co. Ltd.

These are personal views.

Shvetal Parikh 18/11/2015

 

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