MODVAT credit disallowed where depreciation claimed on the duty component; notify excise to withdraw credit.
A MODVAT mechanism allows credit of duty on capital goods to offset excise on final products provided the manufacturer does not claim depreciation under Section 32 for the portion of cost representing that duty; a declaration to the Assistant Collector is required. The Board instructs that if depreciation is claimed on the duty component after credit was availed, Central Excise authorities must be notified to withdraw the credit.

Small scale exemption: units with home consumption clearances within threshold need not register or use AR4/AR4A export procedure.
Registration under Central Excise is not required where the aggregate value of clearances for home consumption falls within the small scale exemption threshold; export clearances are not to be clubbed with home consumption clearances for eligibility. Qualifying units must file the prescribed declaration under the exemption notification but need not obtain registration or follow the AR 4/AR 4A export procedure.

Concessional customs duty rule applies, reduced customs duties used to compute excise on DTA clearances from EOUs.
Excise on DTA clearances from 100% EOU/EPZ units is computed by reference to customs duties on like imports, except that 50% of each basic and auxiliary customs duty is the effective chargeable amount under the exemption notifications. For determining additional customs duty under the Customs Tariff Act, the Section 14 customs value must be increased by these concessional basic and auxiliary duties, and additional duty is then computed on that augmented value. The Board instructs field formations to follow the Method A example for assessment.

Temporary importation of containers limited by re-export condition and bond amounts capped at duty liability.
Temporary importation of containers is exempt from Customs duty if re-exported within six months and other notification conditions are met; clearance may proceed without individual Bills of Entry if identification particulars and a bond (specific or general) are provided, with bond amounts not exceeding the Customs duty leviable and extensions of the six-month period allowed only for justifiable reasons and not routinely.

Jewellery seizure limits under search provisions: specified personal thresholds and discretionary exclusions govern seizure during income-tax searches.
Guidelines require that during income-tax searches only gold jewellery exceeding the gross weight declared by a wealth-tax assessee be seized, while persons not assessed to wealth-tax are to have specified personal jewellery thresholds excluded from seizure; authorised officers must prepare a detailed inventory for assessment and may, considering family status and community customs, exclude larger quantities subject to reporting to the authorising Director/Commissioner.

Interest calculation under section 47: the statutory short payment period starts from assessment finalisation after vessel entry.
Where a Bill of Entry is assessed before the vessel's entry inward, the operative date for calculating the interest period under section 47 is the date on which assessment is completed upon submission of the Bill of Entry to the Customs House after entry inward has been granted to the vessel; the short payment period for interest is computed from that date of finalisation of assessment.

Accounting of scrap of metals clarified: daily consolidated RG-1 entries, flexible bonded storage, and valuation by predominance.
Consolidated RG-1 entries for waste and scrap must be made at the end of each day; shift accounts are unnecessary. Multiple factory storage locations may be treated as bonded store rooms where a single junk yard is not available. Storage loss is to be handled under existing instructions with remission of duty allowed within those parameters. Recycling and captive consumption are subject to applicable duty rules. Assorted scrap valuation and classification must follow Note 5 of Section XV, using the predominance-by-weight principle.

Prosecution initiation procedures require adjudicating and jurisdictional collectors to independently assess and record fitness before proceeding.
When one Adjudicating Officer handles cases for multiple factories under different Collectorates, the Adjudicating Collector must record a finding on fitness to prosecute, then send the file or parallel file to each jurisdictional Collector; each jurisdictional Collector must independently examine the record, record reasons for their view on prosecutorial fitness, and forward their opinion together with the Adjudicating Officer's finding to the Principal Collector. Where prosecution is proposed at the assessee's registered office headquarters, case records and Principal Collectors' opinions should be forwarded to the Principal Collector nearest that Head Office.

Invoice-based assessment: advance serial-number intimation and computerised invoice authentication required, with separate invoices for split consignments.
Assessees must intimate invoice serial numbers in advance (by post or other means) covering projected periods, with revisions if exhausted; computerised invoices may print serial numbers at printing and be authenticated before assignment of date and time of removal, provided computer stationery bears an identification or distinctive mark linking it to the issuer. Split consignments require separate invoices for each lot and provisional assessment; transfers for non-sale movements must be followed by an assessee-issued invoice acceptable for Modvat, explaining pricing differences and complying with annexure details.

Registering authority designation: Rubber Board to issue RCMC for natural rubber; CAPEXCIL retains role for other rubber products.
The Rubber Board is designated as the Registering authority for issuance of RCMCs to exporters of different grades of natural rubber, while CAPEXCIL shall continue as the Registering authority for all other rubber products; this clarification supplements an earlier REP circular on the subject.

SEBI approval requirement for asset management companies: AMCs must obtain memorandum and articles clearance before company registration.
Registrars of Companies should not insist on prior regulatory approval for incorporation of intermediaries like merchant bankers, registrars to an issue, investment advisers and portfolio managers; however, asset management companies must obtain clearance of their draft memorandum and articles of association from the regulator under the mutual fund framework before being registered by the Registrar of Companies, and prior departmental guidance on AMCs continues to apply.

Interest on deferred excise dues must be charged per existing instructions unless a clear court stay prevents recovery.
Instalment payments of Central Excise dues remain subject to recovery of interest on the outstanding principal as prescribed in the Board's prior instructions, including the specified basis and compounding, and such interest should be collected unless there is a clear court stay preventing recovery.

Use of invoice: valuation principles unchanged, priority assessment of April and May RT 12 returns with supervisory approval before show cause.
Invoices are to replace gate passes and price lists from 1 April 1994 while valuation principles under Section 4 and the Valuation Rules remain unchanged; judicial decisions continue to guide assessable value determinations. Range officers are to be instructed via group discussions led by senior collectors on using invoices and specified documents for valuation. RT-12 returns for April and May 1994 must be assessed on priority, with Superintendents prevented from issuing show-cause notices or resorting to provisional assessment without Assistant Collector or Deputy Collector approval; Collectors must report evaluations to the Board by the prescribed deadlines.

Prior import requirement for raw cotton mandates import before export of cotton yarn under duty exemption scheme.
Licensing authorities must issue duty free licences for export of cotton yarn only with a specific condition that import of raw cotton shall precede export by the licencee to fulfil the export obligation; replenishment imports of raw cotton under the duty exemption scheme are not permitted and both quantity and value based licences must reflect this condition.

Monetary threshold for Central Excise prosecution raised to streamline initiation and conserve departmental resources.
Enhancement of the monetary limit for initiating prosecution under the Central Excise Act directs that prosecution be confined to matters exceeding a newly prescribed threshold, applied prospectively, to prioritise higher-value cases and ensure better utilisation of departmental manpower, time and resources.

Withdrawal of prosecution requires approval by a superior authority; once complaint is filed, judicial decision governs continuation.
Prosecution under the Central Excises and Salt Act, 1944 requires evidence of mens rea before initiation and should be vigorously pursued. If adverse facts emerge after a Principal Collector has approved prosecution but before complaint filing, the Principal Collector may recommend withdrawal to the Board; withdrawal authority must be superior to the approving authority. Where a complaint is already filed, continuation or withdrawal is for judicial determination, and if the court orders withdrawal an Assistant Collector may act after formal Principal Collector authorization. Principal Collectors must closely scrutinize withdrawal requests.

Capital gains residency rule: Mauritius residents' gains from alienation of shares taxable only in Mauritius.
Paragraph 4 of Article 13 allocates exclusive taxing rights over capital gains from property not covered by earlier subparagraphs to the State of residence of the person deriving the gains; accordingly, capital gains realised by a Mauritius resident from the alienation of shares are taxable only in Mauritius under Mauritius law and not taxable in India. Paragraph 5 defines "alienation" to include sale, exchange, transfer, relinquishment, extinguishment of rights or compulsory acquisition.

End-use certificate narrowed to specified non-medicinal bulk drugs; certification required only for listed items.
The Board limits the requirement for an end-use certificate for claiming exemption in respect of 'other bulk drugs' to the specific substances listed in Annexure I, because those listed have significant non-medicinal uses; bulk drugs generally used in medicine and those in the DPCO Second Schedule need not be subject to the end-use certificate condition. Field formations and trade are to be notified of this restricted application.

Tax withholding on payments for any work expands to include services and transport, with prescribed withholding rates on pay-outs.
Section 194C mandates tax deduction at source from payments for carrying out any work, broadly including services, transport, advertising, broadcasting, telecasting, labour supply, materials incidental to work, and works contracts; applies to written and oral contracts, with withholding at 2% from contractors and 1% by contractors on payments to resident sub-contractors, calculated on payment amount and triggered on credit or payment. Exclusions include contracts in substance for sale of goods, hiring or renting of equipment, certain banking transactions, and amounts treated as salaries; a non-deduction certificate may be obtained where income is not taxable.

Application of Central Excise offences and penalties extends to the Additional Duties of Excise Act, effective upon presidential assent.
The amendment provides that provisions of the Central Excise Act and rules relating to offences and penalties shall apply to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, taking effect from the date the Finance Bill receives presidential assent, thereby aligning enforcement and sanctioning under the Additional Duties Act with the Central Excise offences-and-penalties framework.