CENVAT credit reversal required for inputs written off as obsolete; partial write-offs allowed if inputs remain usable in manufacture.
Admissibility of MODVAT/CENVAT credit depends on whether written-off inputs or capital goods remain available and usable; fully written-off unused inputs and capital goods written off before use require repayment of credit, whereas partial write-offs do not require repayment if the inputs remain capable of and available for use in manufacturing.

Valuation of computer systems: loaded software must be included in assessable value while separate media are assessed separately.
Valuation of computer systems must include the value of any software loaded, etched, burnt or otherwise installed on the machine at the time of clearance, whether operating, application, or firmware/basic software; tangible copies of software supplied separately on removable media are to be assessed separately. The adoption of transaction value does not change this rule; valuation is determined by the form in which the goods are cleared.

Transaction value determination clarifies allowable deductions and inclusions affecting assessable value under new valuation rules.
The circular clarifies that transaction value is determined for each removal, with "greatest aggregate quantity" referring to the largest quantity of identical goods sold on a particular day. Deductions from transaction value are limited to amounts actually paid or payable by the assessee; transportation costs owned by the manufacturer may be deducted if separately shown and supported by costing, return-trip charges are not deductible unless recovered, and transit insurance may be included in transport cost. Packing, buyer-borne advertisement or dealer-incurred after-sales charges that are incurred on behalf of the manufacturer are added to assessable value. Captive consumption, job-work, related-party sales, samples and removals with CENVAT consequences are addressed by specific Rules as set out.

Export warehousing: list of approved places expanded to include an adjacent district to facilitate export operations.
Amend paragraph 2(2) of the Board's export warehousing circular to add District of Kancheepuram to the list of places where warehouses may be established and registered under sub-rule 2 of rule 20 read with Notification No.46/2001, citing proximity to the principal port and growing export potential; field formations to be informed and receipt acknowledged.

National Calamity Contingent Duty exemption clarified: NCCD not payable on goods exported under bond unless export fails to occur.
NCCD is treated as an excise duty and, consistent with the policy of relieving exported goods from domestic taxes, the notification permitting export without payment of duty under bond (issued under Rule 19 of the Central Excise Rules) applies to NCCD; therefore no NCCD is payable on goods actually exported under bond, but if export does not eventually take place the goods will be liable to all excise duties including NCCD.

Excise concession for cars for physically handicapped: official certification of suitability permits concessional duty even for standard models.
Concessional excise duty for cars for physically handicapped persons depends on an end use certification by an officer not below Deputy Secretary that the specific vehicle is capable of use by a handicapped person; the vehicle need not be specially manufactured for handicapped use. Vehicles with special features (for example, automatic transmission) qualify when the buyer produces the Ministry of Industry certificate, and ordinary use by non disabled persons does not bar the concession.

Multiple declared MRPs: the highest listed price governs even if a higher MRP is crossed out.
Where more than one retail sale price is declared on a package, the highest declared price prevails for excise purposes even if a higher MRP has been visibly crossed out; administrative steps require informing field formations, issuing a trade notice for trade benefit, and obtaining acknowledgment of receipt.

Duty-free fuel supply applies when research vessels operate beyond territorial waters; denied for vessels conducting oil exploration within EEZ.
Supply of fuel to research vessels is duty-free when the vessels operate beyond India's territorial waters because that constitutes an export; fuel supplied to vessels conducting mineral oil exploration or extraction within the Exclusive Economic Zone or Continental Shelf is not an export and duty-free supply is not permitted, as examined under the definitions in the Customs Act, 1962 and Central Excise Rules, 2002.

Special Economic Zone provisions inserted in Customs and excise laws; retrospective excise validations and customs duty increased.
Reference substitution updates the Customs Act cross reference from the Foreign Exchange Regulation Act to the Foreign Exchange Management Act, 1999 and inserts Chapter XA and related Central Excise amendments for Special Economic Zones pending notification. Retrospective Central Excise Rule changes effective 1 3 2002 prescribe payment and return procedures for specified goods and validate deferments and extended deadlines for affected assessees. Other amendments correct the taxable service definition for cable operators, validate a retrospective cess notification for crude oil under production sharing contracts, and raise basic customs duty on certain milk derived fats to the WTO bound 40% rate.

Cenvat credit admissibility limited to inputs and capital goods used within the factory; narrow exceptions for job work apply.
Admissibility of CENVAT credit is confined to inputs and capital goods used within the manufacturer's factory premises under the Cenvat Credit Rules, 2001; limited exceptions are recognised for inputs used by a job worker in manufacture of intermediate products and for capital goods sent to a job worker's premises.

Duty determination on intermixed petroleum products: higher duty between unused concessional SKO and gain in MS/HSD applies.
Where SKO imported under concessional duty intermixed with MS or HSD in pipelines, the interface quantity shall be quantified and taxed at the higher of (a) duty payable on SKO not used for its intended concessional purpose and (b) duty payable on the surge/gain in MS or HSD; this modifies prior instructions permitting simple offsetting between product gains and losses.

Export bond procedure: manufacturer exporters need not obtain CT-1 certificates; CT-1 required only for merchant exporters.
The Board clarifies that merchant exporters must obtain CT-1 certificates after furnishing a bond to procure excisable goods duty free for export, whereas manufacturer exporters who execute a bond with the jurisdictional authority or Maritime Commissioner, or file a Letter of Undertaking, need not obtain CT-1 for export purposes; exporter classification is to be determined by authorities on the merits.

Classification of goods: plastic nameplates and component fittings treated by intrinsic character, affecting excise liability.
Name plates, emblems and labels of plastic are classifiable under sub heading 3926.90 and not as motor vehicle parts; bushes and thrust washers lacking anti friction rings are not plain shaft bearings under heading 84.83 and should be classified with the machines they serve; insulated cables with fitted connectors fall under heading 85.44 irrespective of who supplied inputs. Assembly, testing and affixation of brand such that an excisable product exists in unassembled form at the premises constitutes manufacture for excise. Authority to prosecute appeals requires a board resolution and locus standi can be contested post admission; letters from non adjudicating officers are not appealable orders.

Levy and collection procedures: referential adoption makes confiscation and penalty provisions applicable to additional excise duties.
Section 3(3) of the Additional Duties Act adopts provisions of the Central Excise Act and Rules "so far as may be", including those relating to refunds and exemptions; by this referential legislation the procedural and substantive mechanisms for levy and collection-assessment, recovery, confiscation and penalties-apply to additional duties unless expressly inconsistent with the 1957 Act.

Storage of duty paid goods: permitted in warehouses with commissioner permission subject to revenue safeguarding conditions.
The Board permits storage of duty paid goods belonging to another manufacturer in a warehouse provided the permission of the Commissioner having jurisdiction is obtained; the Commissioner may impose conditions to safeguard revenue before allowing such storage.

Concessional duty entitlement: EOUs using imported consumables with capital goods retain benefit if notification conditions met.
The Board clarifies that consumables used with capital goods are not raw materials and that EOUs using imported consumables with capital goods should not be denied the concessional duty benefit under Notification No.8/97-CE (as amended), provided all other conditions of the notification are met; field formations must cease the misinterpretation and implement the clarification.

Examination report requirement: examined and sealed export consignments must be accompanied by a completed report to the port.
Exports examined and sealed by Central Excise or Customs officers at a factory or approved warehouse must be accompanied to the port or airport by a duly completed Examination Report in the prescribed form, with its details captured in the export registration system at the time of registration; field formations are to enforce compliance and acknowledge receipt of the circular.

Duty payment timing: pay and credit central excise duty by month end or clearances will be treated non duty paid.
Assessees must calculate and deposit central excise duty for the second fortnight of March and ensure the amount is credited to the Government account by the month end in compliance with rule 8, since duty is deemed discharged only when so credited; failure to ensure credit will render clearances non duty paid. Trade Notices should be issued to alert the trade and secure timely crediting of duty (including clearances on the last day).

Protective show cause notices: pending duty cases on cotton yarn cops/cones for hank conversion must be expedited.
The Board directed issuance of protective show cause notices for duty on cotton yarn on cops/cones consumed captively or sent out for conversion into Hank yarn, observing that charging duty on the intermediate product would negate the exemption for plain reeled Hanks used by the Handloom Sector; following acceptance by the Auditor General and settlement of objections, pending call book cases are to be taken out and decided expeditiously with field formations informed.

Pre-audit requirement for refund claims standardized; low-value claims random post-audit and mid-range claims compulsory post-audit implemented.
Pre-audit is required for refund and rebate claims at or above the high-value threshold while low-value claims may be post-audited by random selection by the Deputy/Assistant Commissioner (Audit), and intermediate-value claims must be compulsorily post-audited; a supervised audit cell of specified officer levels is to be constituted and earlier instructions are modified accordingly.