CENVAT Credit Rules Amended – Board should appoint a Proof Reader
WHAT the CBEC urgently needs is a proof-reader. Cadre review and all other important ambitious projects can wait, notwithstanding the candle march at noon by the Superintendents demanding better promotional opportunities. When we point out the blunders of the Board in law-making, angry officers ask us, “are you perfect?”. We, certainly, are not, but our mistakes don't affect the nation and we don't make laws! A lawmaker is expected to be careful at least in elementary drafting.
Look at the first Central Excise Non Tariff Notification of 2012 issued last week. It sates, "In the CENVAT Credit Rules, 2004, in rule 12, for the words For the words notwithstanding anything contained in these rules" the words “notwithstanding anything contained in these rules but subject to the proviso to clause (i) of sub rule (1) of the rule 3” shall be substituted. ”
Please note – 'For the words' is repeated.
Coming to the amendment,
Rule 12 of the CENVAT Credit Rules, reads as, "Special dispensation in respect of inputs manufactured in factories located in specified areas of North East region, Kutch district of Gujarat, State of Jammu and Kashmir and State of Sikkim. - Notwithstanding anything contained in these rules, where a manufacturer has cleared any inputs or capital goods, in terms of notifications of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/99- Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th July, 1999] or No. 33/99- Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated the 8th July, 1999] or No. 39/2001-Central Excise, dated the 31st July, 2001 [G.S.R. 565(E), dated the 31st July, 2001] or notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue) No.56/2002-Central Excise, dated the 14th November, 2002 [G.S.R. 764(E), dated 14th November, 2002]or No.57/2002-Central Excise, dated the 14th November, 2002 [ GSR 765(E), dated the 14th November, 2002] or notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 56/2003-Central Excise, dated the 25th June, 2003 [G.S.R. 513 (E), dated the 25th June, 2003] or 71/2003-Central Excise, dated the 9th September, 2003 [G.S.R.717 (E), dated the 9th September, 2003, or No.20/2007-Central Excise, dated the 25th April, 2007 [ GSR 307 (E), dated the 25th April, 2007] the CENVAT credit on such inputs or capital goods shall be admissible as if no portion of the duty paid on such inputs or capital goods was exempted under any of the said notifications.”
As per proviso to clause (i) of sub rule (1) of rule 3, “CENVAT Credit of such duty of excise shall not be allowed to be taken when paid on any goods in respect of which the benefit of an exemption under notification No. 1/2011 -CE dated the 1st March 2011 is availed.”
Now, this proviso is made applicable to Rule 12 also.
This notification No. 1/2011 is the 1 percent effective rate of duty introduced in last year's budget. This 1 percent duty is not allowed as CENVAT Credit. But for about 11 months, they forgot to amend Rule 12, which allowed credit notwithstanding anything said in the rules.
Anytime is good time to correct a mistake.
Notification No., Dated: February 09, 2012