CHEWING TOBACCO AND UNMANUFACTURED TOBACCO PACKING MACHINES (CAPACITY DETERMINATION AND COLLECTION OF DUTY) RULES, 2010

In case a factory did not produce the notified goods during any continuous period of fifteen days or more, the duty calculated on a proportionate basis shall be abated in respect of such period provided the manufacturer of such goods files an intimation to this effect with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, at least three working days prior to the commencement of said period, who on receipt of such intimation shall direct for sealing of all the packing machines available in the factory for the said period under the physical supervision of Superintendent of Central Excise, in the manner that the packing machines so sealed cannot be operated during the said period :

Provided that during such period, no manufacturing activity, whatsoever, in respect of notified goods shall be undertaken and no removal of notified goods shall be effected by the manufacturer except that notified goods already produced before the commencement of said period may be removed within first two days of the said period:

Provided further that when the manufacturer intends to restart his production of notified goods, he shall inform to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, of the date from which he would restart production, whereupon the seal fixed on packing machines would be opened under the physical supervision of Superintendent of Central Excise.

Every manufacturer shall declare the retail sale price of the notified goods on the package of such goods :

Provided that if the manufacturer fails to declare the retail sale price before removing the goods from the place of manufacture or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of these rules or tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the manner specified in these rules and such price shall be deemed to be the retail sale price for the purposes of these rules.

Where a manufacturer removes the notified goods in the manner and circumstances specified in proviso to rule 11, then, the retail sale price of such goods shall be ascertained by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, in the following manner, namely :-

(i) if the manufacturer has manufactured and removed identical goods, within a period of one month, before or after removal of such goods, by declaring the retail sale price, then, the said declared retail sale price shall be taken as the retail sale price of such goods;

(ii) if the retail sale price cannot be ascertained in terms of (i), the retail sale price of such goods shall be ascertained by conducting the enquiries in the retail market where such goods have normally been sold at or about the same time of the removal of such goods from the place of manufacture :

Provided that if more than one retail sale price is ascertained under (i) or (ii), then, the highest of the retail sale price, so ascertained, shall be taken as the retail sale price of all such goods.

Explanation. - For the purposes of this rule, when retail sale price is required to be ascertained based on market inquiries, the said inquiries shall be carried out on sample basis;

(iii) Where a manufacturer alters or tampers the retail sale price declared on the package of goods after their removal from the place of manufacture, resulting into increase in the retail sale price, then, such increased retail sale price shall be taken as the retail sale price of all goods removed during a period of one month before and after the date of removal of such goods :

Provided that where the manufacturer alters or tampers the declared retail sale price resulting into more than one retail sale price available on such goods, then, the highest of such retail sale price shall be taken as the retail sale price of all such goods;

(iv) If the retail sale price of goods cannot be ascertained under (i) to (iii), the retail sale price shall be ascertained in accordance with the principles of this rule.

(1) In case a manufacturer does not intend to further operate a packing machine, he shall intimate the same to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, at least three working days in advance from the date so intended, whereupon the same shall be uninstalled and sealed by the Superintendent of Central Excise and removed from the factory premises under his physical supervision.

⁴[Provided that in case it is not feasible to remove such packing machine out of the factory premises, it shall be uninstalled and sealed by the Superintendent of Central Excise in such a manner that it cannot be operated.]

(2) In case a manufacturer wants to add or install a packing machine in his premises, he shall give a notice to this effect at least three working days in advance from the date of such addition or the installation of the packing machine to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, who shall allow the addition or installation, as the case may be, under the physical supervision of Superintendent of Central Excise.

(3) No manufacturer shall be allowed to keep in his factory any sk of packing material for goods of those retail sale prices which have not been declared by him in accordance with provisions of these rules.

(4) No manufacturer shall be allowed to trade in notified goods of retail sale prices not declared by him in accordance with provisions of these rules, from his factory premises.

(5) In case a manufacturer permanently discontinues manufacture of goods of existing retail sale prices, he shall declare the balance sk of notified goods of existing retail sale prices and their packing material on the day he discontinues manufacturing of goods of existing retail sale prices.

4. Inserted by the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) (Amendment) Rules, 2010 vide Notification No. 18/2010-(N.T.) dated 13.04.2010 w.e.f. 13.04.2010.

Except in accordance with such terms and conditions as the Central Government may by notification specify in this behalf, no rebate of excise duty shall be granted under rule 18 of the Central Excise Rules, 2002, in respect of notified goods on which duty has been paid under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 16/2010-Central Excise, dated the 27th February, 2010 and exported out of India.

Notwithstanding anything contained in these rules or in the Central Excise Rules, 2002 -

(i) no notified goods shall be exported without payment of duty; and

(ii) no material shall be removed without payment of duty from a factory or warehouse or any other premises for use in the manufacture or processing of notified goods which are exported out of India.

(1) A manufacturer of chewing tobacco notified under section 3A of the Act shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of,-

(i) the duty of excise specified in the First Schedule to the e Tariff Act, leviable under the Act;

(ii) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001);

(iii) the education cess on excisable goods leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 (23 of 2004);

(iv) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007);

(v) the additional duty of excise leviable under section 85 of Finance Act, 2005 (18 of 2005)], paid on chewing tobacco in bulk packs received in his factory on or after the 8th day of March, 2010 for use in manufacture of chewing tobacco notified under section 3A of the Act.

(2) Except as provided under sub-rule (1), no CENVAT credit of duty paid on any input, capital goods or input services used in or in relation to manufacture of the notified goods shall be taken under the provisions of CENVAT Credit Rules, 2004.

(3) The CENVAT credit under sub-rule (1) may be taken immediately on receipt of bulk packs of chewing tobacco and may be utilised for payment of duty leviable under section 3A of the Act on chewing tobacco:

Provided that while paying duty, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month preceding the month for which duty is paid:

Provided further that CENVAT credit in respect of -

(i) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001;

(ii) the education cess on excisable goods leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004;

(iii) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007;

(iv) the additional duty of excise leviable under section 85 of Finance Act, 2005,

shall be utilised towards the payment of the said National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001, or the education cess on excisable goods leviable under section 91 read with section 93 of the said Finance (No. 2) Act, 2004, or the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 or the additional duty of excise leviable under section 85 of the Finance Act, 2005 respectively, on chewing tobacco notified under Section 3A of the Act and manufactured by the manufacturer.

(4) The CENVAT credit under sub-rule (1) shall be taken by the manufacturer on the basis of an invoice issued by a manufacturer for clearance of bulk packs of chewing tobacco from his factory.

(5) The manufacturer shall maintain proper records for the receipt, disposal, consumption and inventory of the bulk packs of chewing tobacco used for manufacture of chewing tobacco notified under section 3A in which the relevant information regarding the value, duty paid, CENVAT credit taken and utilised, the person from whom such bulk packs have been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer taking such credit.

(6) Where the CENVAT credit has been taken or utilised wrongly, the same along with interest shall be recovered from the manufacturer and the provisions of sections 11A and 11AB of the Act, shall apply mutatis mutandis for effecting such recoveries.

Provided further that all such bulk packs of chewing tobacco on which credit has been wrongly taken or utilised wrongly shall be liable to confiscation and the manufacturer shall be liable to a penalty not exceeding the duty on such bulk packs of chewing tobacco :

Provided also that in a case, where the CENVAT credit has been taken or utilised wrongly on account of fraud, willful mis-statement, collusion or suppression of facts, or contravention of any of the provisions of the Act or the rules made there under with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Act.

(7) Except as provided in this rule, no other provisions of CENVAT Credit Rules, 2004 shall apply in relation to the notified goods.

Notwithstanding anything contained in these rules, where a manufacturer permanently ceases to work in respect of all the machines installed in the factory and who has filed an intimation for surrender of registration with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise, for this purpose, the duty payable by him for the month in which he so ceases to work permanently shall be calculated on the pro rata basis of the total number of days in the said month and total number of days before the date of receipt of said intimation with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, and the duty paid for the month in accordance with the notification referred to in rule 7 shall be adjusted towards the duty so calculated and on such adjustment, if there is any excess payment, it shall be refunded to the manufacturer by the 20th day of the following month and deficiency, if any, shall be payable by him by the 5th day of the following month.

Explanation. - For the purposes of this rule, ?ceases to work? shall not include a manufacturer who ceases to operate his factory for one or two shifts only.

(1) Subject to the provisions of rule 16 and section 11AC of the Act, if any manufacturer produces or removes notified goods in contravention of any provision of these rules, then, all such goods shall be liable to confiscation, and the manufacturer shall be liable to a penalty not exceeding the duty leviable on the notified goods in respect of which aforesaid contravention has been committed.

¹³[Provided that in case of contraventions involving non-declaration of number of packing machines available in the premises of a manufacturer, the duty leviable in respect of such undeclared packing machines shall be determined on the basis of total number of undeclared packing machines found available in the premises, the highest retail sale price of the pouches manufactured with the aid of undeclared packing machines and the rate of duty per packing machine corresponding to the higher maximum packing speed as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 16/2010-CE dated the 27th February, 2010.]

(2) If it is found that goods have been manufactured in or cleared from a unit which is not registered with the jurisdictional Central Excise Office, then, the duty liability of such unit shall be determined on the basis of number of packing machines found available in the ¹⁵[premises of the unit, the retail sale price of the pouches manufactured with the aid of such packing machines and the rate of duty per packing machine corresponding to the highest maximum packing speed as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 16/2010-CE dated the 27th February, 2010, and unless] evidence to the contrary is provided to the satisfaction of the Central Excise Officer, such machines shall be deemed to have been in operation, in case of financial year 2009-10, since the 8th March, 2010, and for subsequent financial years, since the 1st day of April of respective financial year, and shall be construed as operating packing machines for the purposes of rule 7 and dealt with accordingly.

13. Inserted by the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015 vide Notification No. 04/2015-Central Excise (N. T.) dated 01.03.2015.

15. Substituted by the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015 vide Notification No. 04/2015-Central Excise (N. T.) dated 01.03.2015 for the following : - "premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines and unless"

Except as herein provided, all provisions of the Act and the Central Excise Rules, 2002, including those relating to maintenance of daily sk account, removal of goods on invoice, filing of returns and recovery of dues shall apply mutatis mutandis.

Explanation. - Unless otherwise specified in these rules, for the purposes of these rules, the goods shall be deemed to have been manufactured or produced with the aid of a packing machine, if they are cleared from a factory where a packing machine is installed, irrespective of whether it is in use or not, or is in working condition or not.