Issue pertaining to CNG manufacturers – CBEC clarifies
1. Single Registration: - Notification No. 43/2008-CE(NT) dated 06.10.2008 has been issued to amend the notification No. 35/2001-Central Excise(N.T) dated 26.06.2001, to provide for single registration to the manufacturers of Compressed Natural Gas (CNG) for all the manufacturing premises falling under the jurisdiction of one Chief Commissioner of Central Excise. Consequently, notification No. 44/2008-CE(NT) dated 06.10.2008 has also been issued to amend the notification No. 14/2002-Central Excise (N.T) dated the 8th March, 2002, to extend the jurisdiction of the Commissioner of Central Excise under whose jurisdiction a CNG manufacturer obtains single registration, to that of the jurisdiction of the concerned Chief Commissioner of Central Excise.
2. CNG manufacturers, whose premises fall under jurisdiction of more than one Chief Commissioner, will have to take separate registrations under the jurisdiction of each Chief Commissioner. Such registration can be taken in any of the Commissionerates within the jurisdiction of such Chief Commissioner. Therefore, it has been provided in the notification that CNG manufacturer, who is already registered under the earlier provisions, may apply for fresh registration or file amendment to the existing registration as the case may be, as per the new provisions, if required.
3. Availability of CENVAT credit: - In the case of CNG manufacturers, central excise registration is to be given only in respect of those premises, where CNG is actually manufactured i.e. where compressor is installed to convert natural gas into CNG. Registration is not to be given for premises where CNG is merely dispensed (commonly known as daughter stations) after being transported in mobile cascades. Accordingly, the CENVAT credit can be taken only on those inputs/capital goods, which are used in registered premises, where actual manufacturing takes place, and not on capital goods goods/inputs at daughter station. The legal position holds good for the period prior to the amendment also.
4. Practice of measurement of CNG production:- Section 3 of the Central Excise Act, 1944 read with rule 4 of the Central Excise Rules, 2002, requires a manufacturer to pay duty on the quantity manufactured and removed from the factory. Therefore, the quantity sold to the buyer at daughter stations (whether belonging to same entity or other) cannot be taken as a basis for determining the duty payable, and the quantity of CNG manufactured/cleared by a manufacturer at the registered premises itself should be the basis for calculating the quantum of duty payable on such clearances. Accordingly, it has been decided that whenever CNG is transported in the mobile cascades to the daughter stations, the quantity filled in the mobile cascades should be measured at the registered premise by installing suitable measuring device at the point of filling the mobile cascade. For the purpose of accountal of daily production, a single invoice at the end of the day for the total quantity filled in cascades may be prepared. However, when CNG is also dispensed at the registered premises itself (where CNG station is situated in the same premises where compression facility is situated) and where both the compression and CNG dispensing unit belong to the same legal entity, the quantity of CNG actually dispensed/sold from the dispensers can be considered for payment of excise duty.
Board wants the above provisions/instructions to be brought to the notice of the CNG manufacturers as well as field formations. Board also wants the issues to be discussed with the representatives of CNG manufacturers.
CBEC NO. Circular No. 875/13/2008- CX Dated: October 16, 2008