Notification no. required

[Srivatsan Krishnamachari]

Dear Experts,

I need notification no. for the amendments made in the Cenvat credit rules 6 in the year 2010 finance act retrospectively.

The issue is related to 'maintenance of separate books when sales made to the dutiable goods and exempted goods.

Please provide rule position as on 2010 and after amendment.

Thanking you all for your support.

Regards

Srinivas

[Ganeshan Kalyani]

Refer Notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011

[MADAN RAHEJA]

In my view no seperate notification is required to be issued for revalidation of provisions under Finance Act. Rule 6 of Cenvat Credit Rules, 2004 was amended retrospectively w.e.f 10-9-2004 vide Section 73 of Finance Act, 2010 read with Schedule 8 of Act ibid under which a new sub-rule 7 was inserted in said Rule 6. A copy of this inserted sub-rule is given below for reference. It may be mentioned that similar amendment was made in Rule 6 of Cenvat Credit Rules, 2001/2002 and earlier MODVAT Rules.

Copy

In the CENVAT Credit Rules, 2004, in rule 6, after sub-rule (6), the following sub-rule shall be inserted, namely :-

‘(7) Where a dispute relating to adjustment of credit on inputs or input services used in or in relation to exempted final products relating to the period beginning on the 10th day of September, 2004 and ending with the 31st day of March, 2008 (both days inclusive) is pending on the date on which the Finance Bill, 2010 receives the assent of the President, then, notwithstanding anything contained in sub-rules (1) and (2), and clauses (a) and (b) of sub-rule (3), a manufacturer availing CENVAT credit in respect of any inputs or input services and manufacturing final products which are chargeable to duty and also other final products which are exempted goods, may pay an amount equivalent to CENVAT credit attributable to the inputs or input services used in, or in relation to the manufacture of, exempted goods before or after the clearance of such goods :

Provided that the manufacturer shall pay interest at the rate of twenty-four per cent. per annum from the due date till the date of payment of the said amount.

Explanation. - For the purpose of this sub-rule, “due date” means the 5th day of the month following the month in which goods have been cleared from the factory.’.

[KASTURI SETHI]

Comprehensive and perfect reply by Sh.Madan Raheja, an expert.

[Ganeshan Kalyani]

Yes Sir. Nicely replied.

AI Summary

Cenvat credit adjustment: retrospective sub-rule allows payment of credit attributable to exempted goods, with interest from due date. A retrospective amendment inserted a sub-rule permitting manufacturers who produced both dutiable and exempt final products during the specified past period to pay an amount equivalent to the CENVAT credit attributable to inputs or input services used for exempted goods, either before or after clearance; the manufacturer must pay interest from the due date (the fifth day of the month following clearance) until payment.