Central Excise notification amendments clarify exemptions and specify duty rates impacting excise treatment of selected goods.
Circular compiles proposed amendments to multiple prior Central Excise notifications and sets out specific substantive measures: specification of the excise duty rate under Section 3A for chewing tobacco and branded unmanufactured tobacco; proposed exemption from excise duty for equipment for initial solar power project set-up; proposed exemption for packaged and canned software; and proposed exemption for specified goods of chapter 24.

Excise duty rate changes expand standard duties and restructure tobacco levies while introducing a clean energy cess and SSI reliefs.
The Finance Bill, 2010 revises Central Excise by raising the standard non petroleum excise rate and specific duties for cement, clinker and large vehicles, increases petrol and diesel levies per litre, restructures tobacco duties including composite and compounded levies and reporting requirements, introduces a Clean Energy Cess on coal as excise (and as CVD on imports), withdraws select exemptions while granting targeted full exemptions and concessional rates, extends SSI reliefs (immediate capital goods credit and quarterly payment eligibility), and enacts procedural amendments to Cenvat Credit and Central Excise Rules to simplify compliance and counter evasion.

Electronic payment and e-filing requirement for high-duty assessees now mandatory with penal consequences for non-compliance.
Amendments to Rule 8(1) and Rule 12(1) mandate that assessees who paid total duty of rupees ten lakh or more in the preceding financial year, including amounts paid by utilization of CENVAT Credit, must effect duty payment electronically and file monthly or quarterly returns electronically with effect from 1-4-2010; non-compliance will attract penal provisions under Rule 27 of the Central Excise Rules, 2002.

Valuation of free samples: assess under Rule 4 using deemed MRP value under Section 4A, adjusted for pack and size.
Valuation of free samples distributed as marketing samples, gifts or physician samples shall be determined under Rule 4 of the Central Excise Valuation Rules by reference to the deemed value under Section 4A for similar goods when normal price is unavailable, with adjustments for size and pack; this approach applies to products assessed under MRP based assessment as well as otherwise.

Power to remand withdrawn: Commissioner(A) lacks remand authority but may adjudicate, modify assessments and issue assessment orders.
Amendment removed the Commissioner (Appeals)'s statutory power to remit matters back for fresh adjudication, and judicial conflict on that deletion was resolved by the Supreme Court's observation that the remand power was withdrawn. The Commissioner (Appeals) nonetheless retains adjudicatory authority to make enquiries and to confirm, modify or annul assessments, to add or subtract items from the adjudicating authority's order, and the Commissioner (Appeals)'s order may be treated as an order of assessment; Commissioners are instructed to follow these rulings and to implement and monitor compliance.

Leviability of beedi cess clarified: cess on unlabelled beedis precludes additional levy after subsequent labelling.
The Ministry confirms the 1981 notification (as amended) remains in force and clarifies cess liability: beedis exempt from Central Excise duty are exempt from beedi cess; if cess has been collected on unlabelled beedis no additional cess is payable on subsequent labelling; however, beedis initially exempt under excise that are later labelled attract cess on the labelled product. The statutory rate was revised subsequently and other provisions continue to apply.

Audit objection adjudication permitted after one year from reply if the Local Audit Report remains unconverted to SOF or DAP.
Where a Local Audit Report (LAR) is not admitted by the department and is not converted into a Statement of Facts (SOF) or Draft Audit Para (DAP) by CERA, show cause notices issued on that LAR may be adjudicated after one year from the date of sending the department's reply to the LAR, provided that immediately before adjudication the LAR has still not been converted into SOF or DAP; this modifies the earlier instruction to issue show cause notices immediately on receipt of audit objections.

Transaction value: MOU price not treated as transaction value; inter company valuation instructions withdrawn, pending appeal, SCNs stayed.
The Board withdraws its earlier guidance treating MOU prices between oil companies as constituting transaction value for excise valuation, in light of a contrary tribunal decision; pending show cause notices on inter company sales are to be consigned to the call book until final determination of the pending appeal, and appeals may be filed immediately where within review or appeal periods.

Substantial expansion must be of specified goods for area-based exemption to apply; overall capacity increase alone is insufficient.
The area-based exemption applies only to the specified goods named in the notifications, and the condition of substantial expansion must relate to an increase in installed capacity of those specified goods. Expansion confined to non-specified goods or only to overall plant capacity does not satisfy the notification condition and therefore does not confer exemption benefits.

Cenvat credit eligibility: credit disallowed where activity does not amount to manufacture; regularisation route available.
Irregular availment of Cenvat credit on activities that do not amount to manufacture is not permissible under Rule 3 read with Rule 6 of the CENVAT Credit Rules, 2004; such processing does not attract duty and thereby does not justify input credit. Departments must advise assessees to stop paying duty and claiming credit where there is no manufacture, while assessees who have already paid duty and face a judicial finding of non-manufacture may seek regularisation under Section 5B of the Central Excise Act, 1944.