Modvat credit on capital goods restricted until factory commences production; credit usable only for duty on manufactured output.
Modvat credit on duty paid for capital goods is allowable only when those capital goods enter into production; manufacturers must file the declaration under Rule 57Q but may avail the credit only after the factory commences production and is registered, and such credit can be utilised solely for payment of duty on goods manufactured and cleared by that factory.

Section 43D effective date corrected: provision applies from 1-4-1991 and to assessment year 1991-92 onward.
Corrigendum corrects that Section 43D of the Income-tax Act, 1961 came into force w.e.f. 1-4-1991 and applies in relation to assessment year 1991-92 and subsequent years, amending the inadvertent statement in para 22.3 of Board's Circular No.621.

Bond based exports without Central Excise Duty: execute prescribed bond, file AR4, and submit proof of export to discharge the bond.
Exports without payment of Central Excise Duty are permitted under a bond regime requiring execution of prescribed bonds (B, B 1, B 16), filing Form AR 4 in six copies, and submission of specified proof of export documents to the authority before whom the bond was executed. Consolidated B 1 general bonds require maintenance of a running bond account and allow block transfers between authorities; proof admission, short shipment demands, diversion for home consumption, re entry and recovery procedures are specified, with supervisory sealing, sampling and AR 4 disposal rules.

Inter-warehousing movement without payment of duty extended to specified locations per notification, requiring acknowledgement for implementation.
Extension of inter-warehousing movement without payment of duty for mineral oil products to and from Bangalore, including Devangunthi and Yelahanka, is effected by Notification No. 68/94 - Central Excise (N.T.), dated 19-12-1994; the circular forwards that notification to implementing officers and requests acknowledgment of receipt to facilitate application of the excise duty exemption for warehousing transfers.

Depreciation on renewable energy devices requires verification to prevent misuse; certification and selective surveys ordered
100 percent depreciation is allowable for windmills and specially designed wind-energy devices. The Board notes suspected misuse by collusive inflation of machinery prices and by claiming depreciation without physical installation. It directs that scrutiny must fully verify these aspects before allowing claims, requires administrative Ministry certification where appropriate, permits selective surveys to verify compliance, and instructs tax administration to coordinate and act to prevent misuse.

Invoice requirements for duty paid stockyard distributions: despatch advice acceptable if depot registered and Modvat details included.
Distribution of iron and steel from a duty paid stockyard may proceed on a despatch advice or challan showing value, payment of duty and other particulars required under the Central Excise Rules. The assessee may issue the invoice from a depot recognised for Modvat credit, provided that depot is registered and the invoice contains the particulars required by the prescribed invoice provision, with maintenance of the prescribed register for such movements.

Confidentiality of taxpayer information: only acknowledgment numbers and assessment years may be posted, duly authenticated and updated.
A.Os. must not display names, addresses, returned incomes or other identifying particulars of taxpayers selected for scrutiny; such displays must be removed. Only lists of acknowledgment numbers and assessment years may be posted, containing no other information, authenticated by Assessing Officers' signatures and updated periodically to preserve confidentiality while ensuring transparency.

Mineral water classification: adding mineral salts to treated potable water renders the product excisable under tariff rules.
Where purified potable water has mineral salt(s) added after purification (including any demineralisation and subsequent addition of minerals), the resultant product is to be classified as mineral water and is excisable under the Central Excise Tariff heading for mineral water; the circular removes the prior trade-name reference used in earlier guidance.

Payment of advance tax: an attested photocopy of the taxpayer's challan counterfoil suffices as proof with the return.
For three-counterfoil challans banks will send one foil to the assessing officer, one to the zonal accounts office and one to the taxpayer for record; the taxpayer may file with the return an attested photocopy of the taxpayer's retained counterfoil, which constitutes adequate proof of payment for advance tax and self-assessment tax under the statutory proof-of-payment requirement.

Failure to deduct tax at source may avoid penalty and prosecution if proper tax and interest are paid by the prescribed deadline.
Employers who failed to correctly deduct tax at source on salaries, including perquisites and allowances, may avoid initiation of penalty or prosecution if they pay the proper tax together with interest by the prescribed extended deadline; the relief also covers prior guidance on salaries and perquisites paid abroad, while coercive recovery of unpaid tax remains permissible, and applies to assessment years beginning 1989-90 through 1994-95.

Manufacture under central excise questioned for blending duty-paid methanol with motor spirit; expert opinion to guide case decisions.
Whether mixing duty-paid methanol with duty-paid motor spirit constitutes manufacture under the Central Excises and Salt Act was referred for technical advice; the Ministry obtained the Chief Chemist, CRCL's opinion and directed that pending cases be decided in light of that expert opinion, with trade and field formations to be advised accordingly.

Classification of domestic flour mills as milling machinery under tariff heading 84.37 affirmed; motor fitment optional.
Domestic flour mills, whether stone type or stoneless type, are complete mechanical milling units with hoppers, grain regulators and optional motor fitment, used to pulverise cereals. Relying on the HSN Explanatory Note and the specific listing for grinding machines for milling cereals, the Board clarifies that domestic flour mills are classifiable as milling machinery under heading 84.37, and earlier instructions are superseded.

Tax deduction at source authorisation: standardised forms and proof-of-payment required before remittance to non-residents.
The Circular prescribes streamlined application and authorisation forms under section 195(1) for remittances to non-residents, requires verification of payer claims against the Income-tax Act and relevant Double Taxation Avoidance Agreements, and mandates production of proof of deposit of tax deducted at source and submission of that proof with Form 27 to the income-tax office before and after remittance.

Export rebate procedure enables self removal or sealed export with AR 4 processing to claim duty rebate through designated authorities.
New rules and Notification No. 41/94 set a consolidated procedure for rebate of excise duty on exports (excluding mineral oil and ship stores) to countries other than Nepal and Bhutan, permitting self removal without prior Central Excise examination or export under Central Excise seal. Both routes require a six copy AR 4 with prescribed declarations; the Superintendent verifies duty payment, endorses copies for the rebate authority and accounts, Customs verifies seals and endorses export copies, and the exporter files a rebate claim within the statutory period with supporting AR 4 and shipping documents for sanctioning by the designated authority.

Tax holiday eligibility for software exports: on site development by units still qualifies if the unit produces and exports the software.
Where a unit located in an EPZ/EOU/STP produces software and exports it, development of the software at the client's premises does not disqualify the unit from the five year tax holiday, provided the software is a product of the unit and the statutory conditions are fulfilled. The 1993 Explanation that produce includes computer programmes is clarificatory and does not withdraw benefits from software exporters in EPZs/EOUs for years prior to the amendment.

Revenue reconciliation: mandated timelines and strict CAO/PAO procedures to verify PLAs and resolve discrepancies promptly.
The Board mandates strict timelines and procedures for verification of PLA and reconciliation of revenue receipts: CAOs must receive PLA copies by the 10th and verify PLA entries against original TR-6 documents within 15 days, reconcile with PAO figures within ten days of scroll receipt, and complete reconciliation for any period within six months; registers and on-the-spot transfer adjustments are required for misclassifications, PAOs must maintain progressive difference registers and notify collectors of long-outstanding items, and Collectors must monitor monthly and report unresolved cases upward.

Classification of micronutrients as fertilisers confirmed, shifting tariff treatment to other fertiliser category and guiding pending assessments.
Micronutrients listed under Schedule 1 Part A of the Fertilizer Control Order and their mixtures are recognised as fertilisers and, under the Interpretative Rules of the Central Excise Tariff, merit classification with fertilisers; they should therefore be classified under the tariff category for Other Fertilisers, and the earlier circular treating them as plant growth regulators is withdrawn.

Export deduction limited to cut and polished minerals; washed raw blocks are excluded from the tax benefit.
Eligibility for the section 80HHC export deduction requires that minerals be both cut and polished before export; mere cutting and washing into raw blocks does not qualify, reflecting an objective to incentivise value addition through polishing and finishing.

Revised counsel fee schedule governs departmental prosecution counsel remuneration and requires existing counsel consent before implementation.
Sanctioning a revised schedule of fees for Prosecution Counsels, the instruction puts the new scale into effect from 1 4 1995, requires obtaining consent from currently engaged counsels to the revised rates, and excludes two metropolitan centres where fees follow rates prescribed by the Ministry of Law Branch Secretariats; the instruction notes concurrence of the Ministry of Law and Justice.

Job-Work scope clarified under Notification requires departments to identify and report similar cases for administrative action.
Supreme Court judgment dated 1-9-1994 construed the scope of the term Job-Work in Notification No. 119 of 1975. The Board directs departments to identify similar cases pending in the Supreme Court, move High Courts or Tribunals where appropriate, and submit a detailed report on action taken, pending similar cases with revenue implications and departmental references, and pending High Court/Tribunal matters with initiated actions and revenue consequences.