Scheme of the Compliance Manual

The manual is divided into six parts. First part consists of details of the compliance to be
completed on daily basis. Second part consists of the details of compliance that is to be ensured
on periodical basis except the daily compliance. Third part consists of the details of the
compliance to be done on happening of some event and export procedures. Fourth part consists
of the details of the records to be maintained Fifth part contains details about specific procedural
compliance. Sixth part mentions certain details that we need from locations to make compliance
system more accurate and to the point.

Each part provides explanatory notes and guidance note to facilitate personnel handling
compliance. For reporting compliance the respective compliance officer needs to fill in the
details in the manner provided in guidance note.
n case of any difficulty or in case of any suggestion for the improvement of the manual! please
intimate "egal Compliance Team at #ead $ffice.
%bbreviation
CE&' Central Excise &ules! ())(
CC&' Cenvat Credit &ules! ())(
&*C' &emoval of *oods at Concessional &ate of +uty &ules! ()),
CE-&' Central Excise -aluation &ules! ()))
CEM' Central Excise Manual
CE%' Central Excise %ct
Part one - Legal compliance to be ensured on daily basis .
,
Sr /o. Compliance re0uired
to be done
1rovision2
Form
Time frame2
Explanatory /ote
&emark of
1ersonnel
handling
compliance
-erified2
%udited
by
3%4 354 3C4 3+4 3E4 3F4
,. &emoval of
manufactured goods
from factory to be
done under cover of
nvoice
&ule ,, of
CE&2nvoice
%t the time of
removal of the
goods
EN (!"
(. +aily Stock %ccounts
to be maintained
&ule ,) of
CE&2 /o form
prescribed
+aily
EN (!#"
6. %vailing CE/-%T
Credit of the raw
material2capital goods
received in the factory
&ule 678 of
CC&2
$n receipt of the
raw material
3,))94 2 Capital
goods 3:)9 same
year4 remaining
next fin. year EN
(!$"
Explanatory Notes'
EN (!"
The invoice shall be serially numbered and should contain the registration number! description%
classification% time and date of remo&al% rate of duty% 'uantity and &alue% of goods and the
duty payable thereon. The invoice shall be prepared in triplicate with original marked as
$&*/%" F$& 5;<E&= the duplicate copy being marked as +;1"C%TE F$&
T&%/S1$&TE&S= the triplicate copy being marked as T&1"C%TE F$& %SSESSEE and
EN (!#"
+aily Stock %ccount should contained particulars regarding description of the goods produced
or manufactured% opening balance% 'uantity produced or manufactured% in&entory of goods%
'uantity remo&ed% assessable &alue% the amount of duty payable and particulars regarding
amount of duty actually paid. The first page and the last page of each account book shall be
authenticated by authorised person.
EN (!$"
n case of receipt of input! CE/-%T credit can be taken immediately on receipt. n case of
receipt of capital goods CE/-%T credit can be taken to the extent of :)9 in the same financial
year and remaining credit can be taken in the next financial year.
(uidance Note'
,. For personnel handling compliance >
a. 1lease mention at what time during the day compliance is done2checked.
b. 1lease specifically mention if there is any deviation! otherwise mention that
compliance done.
c. 1lease give your remark in column 3E4.
(
(. For legal audit personnel .
a. 1lease check at the time of audit! as to at what time during the day! daily compliance
is done.
b. 1lease check whether documents are maintained properly.
c. 1lease also check the contents of the documents and confirm that it is maintained as
per law.
Part t)o - *ompliance to be done on periodical basis except daily compliance'
Sr
/o.
Compliance re0uired to
be done
1rovision2Form Time frame2
Explanatory note! if
any.
&emark of
1ersonnel
handling
compliance
-erified2%u
dited by
3%4 354 3C4 3+4 3E4 3F4
6
,. ;tili?ation of the
CE/-%T credit
accumulated during the
previous month
&ule 6364 CC& 5efore :
th
day of
the month
EN (#!"
( 1ayment of excise duty
in respect of clearance
made during the
previous month
&ule @ of CE&.
T&A Challan
$n :
th
day of the
month
EN (#!#"
6 1ayment of excise in
respect of clearance
made during +arch
&ule @ of CE&.
T&A Challan
$n 6,
st
March.
8 Monthly return &ule ,( of
CE&2 Form E&
>,
5efore ,)
th
day of
month
: Monthly return of
CE/-%T credit
&ule B3:4 of
CC&2 Form
%nnexure to
CC&
5efore ,)
th
day of
month
EN (#!"
5efore payment of excise duty for the month! the CE/-%T credit accumulated upto 6,
st
day of
the month is to be availed.
EN (#!#"
+uty on each clearance should be paid by making debit entry in the 1"%.
(uidance Note for reporting compliance'
% . For personnel handling compliance .
a. 1lease intimate exceptions to the above! if any.
5 . For legal audit personnel .
a. 1lease check at least two months returns and periodical forms2documents on random
basis.

Part three (" E&ent based legal compliance , (#" Export Procedure'
("
Sl /o. Event 1rovision2
Form
Treatment to be given2
Explanatory /ote! if any
&emark of
1ersonnel
handling
compliance
Checked
by
3%4 354 3C4 3+4 3E4 3F4
,. -emo&al of input as
such or after being
partially processed
&ule 8 of
CC&
%t the time of removal of
goods pay amount e0ual to
the Cenvat credit availed
at the time of receiving the
goods
8
(. -emo&al of capital
goods as such 3without
any use4
&ule 8 of
CC&
Take credit of remaining
:)9 3if returned within
the same financial year of
receipt4 and pay duty
e0ual to the credit taken
6. f final product is
brought back to factory
and send back without
any manufacturing
process
&ule ,A of the
CE&
Take credit of the duty
paid at the time of removal
and again pay same
amount of duty at the time
of clearance
8. f final product is
brought back to the
factory and send back
after carrying out some
manufacturing process
&ule ,A of the
CE&
Take credit of the duty
paid at the time of removal
and pay duty at the rate
applicable at the time of
the clearance of the goods
:. *oods cleared for
exports brought back to
factory
C5EC Manual &e>entry within six
months! $riginal
documents should
accompany! intimation to
department in +>6 form
within (8 hours.
(uidance Note for reporting compliance'
% . For personnel handling compliance .
a. f for the above events same procedure followed please mention C Complied by
following same procedureD. f some different procedure is followed! please mention
the procedure followed.
5 . For audit personnel .
a. 1lease check procedure followed for different situations and study its legal basis with
the help of complying authority. &eport import highlights.

(#"
Export Procedures
:. Export under .ond
without payment
of duty
&ule ,E3,4 of
CE&! /otification
/o. ,)2)83/T4!
8(2),3/T42 Forms
CT>, 7 %&E>,
For procedure see
EN ($!#!"
:
A Export on payment of
duty under rebate
claim of input
duty . ;nder this
procedure after
export! after
export of the
goods rebate of
duty paid on
inputs used for
the manufacture
of export goods
can be claimed.
&ule ,@ of CE&!
/otification no.
8,2()), 3/T42
Form %&E>(
For procedure see
EN ($!#!#"
Export on payment of
duty under rebate
claim of duty
paid on export
goods . ;nder
this procedure! at
the time of the
export excise
duty can be paid
and then claimed
as rebate.
&ule ,@ of
CE&2/otification
/o. 8)2()),
3/T42Form %&E>,
For procedure see
EN ($!#!$"
A. -eceipt of inputs
without payment of
duty for Export
manufacturing
&ule ,E 3(4 of
CE&! /otification
/o.
862()),21rovision
s of &*C
For procedure see
EN ($!#!/"
EN - ($!#!"
Conditions and procedures for export of excisable goods under 5ond without payment of excise
duty
,. Conditions' >
%. % general bond in the Form %nnexure> or a letter of undertaking in the Form specified in
%nnexure> in lieu of a bond to be filed with the %ssistant Commissioner of Central Excise!
and
5. goods to be exported within six months from the date of clearance from the factory. The time
may be extended by the %ssistant Commissioner on case to case basis! and
C. Fhen the export is from a place other than registered factory or warehouse! the excisable
goods are in original packed condition and identifiable as to their origin=
(. 1rocedure' >
3a4 $btain certificates in Form CT>, specified in %nnexure> issued by the Superintendent of
Central Excise
3b4 debit in bond account should not exceed the credit available therein at any point of time=
3c4 the goods may be removed without payment of duty after furnishing the letter.
A
3d4 For the sealing of goods intended for export at the place of despatch present the goods with
four copies of application in the Form %.&.E.>, to the Superintendent.
EN ($!#!#"
Following procedure is to be followed for export under claim for rebate of the duty paid on
inputs'
,. % declaration to be filed with Central Excise department describing the finished goods
proposed to be manufactured along with their rate of duty leviable and
manufacturing2processing formula with. The declaration shall also contain the tariff
classification! rate of duty paid or payable on the materials so used.
(. The +epartment shall verify the correctness of the ratio of input and output mentioned in
the declaration f! after verification! the +epartment is satisfied that there is no likelihood
of evasion of duty! he may grant permission to the applicant for manufacture or
processing and export of finished goods.
6. The goods shall be exported on the application in Form %.&.E. (.
8. The claim for rebate of duty paid on materials used in the manufacture or processing of
goods shall be lodged only with the %ssistant Commissioner of Central Excise or +eputy
Commissioner of Central Excise having Gurisdiction of the place approved for
manufacture or processing of such export goods.
EN ($!#!$"
Conditions 7 1rocedure'
i. The excisable goods shall be exported after payment of duty.
ii. The excisable goods shall be exported within six months from the date of clearance.
iii. the market price of the goods shall not be less than the amount of rebate of duty claimed
or &s. :)) whichever is lower.

1rocedure .

3a4 For the sealing of goods four copies of application in the Form %&E> are to be presented to
the Superintendent or nspector of Central Excise. #e shall seal each package or the
container and endorse each copy of the application.
3b4 The Superintendent shall return the original and duplicate copies of application to the
exporter.
3c4 The triplicate copy of application shall be sent either to the officer with whom rebate claim is
to be filed or to the Excise &ebate %udit Section.
3d4 The exporter may prepare 0uintuplicate copy of application for claiming any other export
incentive.
3e4 The claim of the rebate of duty shall be lodged along with original copy of the application.
EN ($!#!/"
1rocedure for obtaining inputs without payment of duty for export processing'
,. Make an application in the Form 3%nnexure 4. Separate application re0uired for each
supplier.
(. % bond is to be executed as directed by the excise department.
B
6. The application to be countersigned by the %ssistant Commissioner.
8. $ne copy of the application received from the department to be forwarded to the
manufacturer2supplier of inputs.
:. 1rocedure to be followed by the supplier .
a. $n the basis of the application countersigned by the excise department! the supplier
shall avail the benefit of the exemption notification.
b. +eclare ratio of input and output and rate of duty payable on excisable goods to be
procured without payment of duty
c. The supplier shall record on the application the removal details! such as /o. and date
of invoice! description! 0uantity and value of subGect goods and amount of excise
duty paid at concessional rate.
d. 1roper account to be maintained indicating the 0uantity and value of subGect goods!
the 0uantity of subGect goods consumed for the intended purpose! and the 0uantity
remaining in stock! invoice wise.
e. a monthly return in &eturn in the format %nnexure to be filed by the tenth day of
the following month.
f. %ny waste arising during the manufacturing process shall be removed on payment of
appropriate duty.
g. The goods shall be exported on the application in Form %.&.E. (.
(uidance Note for reporting compliance'
,. For personnel reporting compliance > f the procedure followed is the same as mentioned
earlier! please indicate in column no. 3F4 that same procedure followed. f a different
procedure is followed! please mention that.

(. For legal audit personnel .
1lease study with the help of complying authority the procedure followed and highlight the
important details
Part four - -ecords to be maintained 0
Sl
/o.
&egister2 record to
be maintained
1rovision2 Form Manner 7 time of
making entry2
maintaining the record2
Explanatory note! if any
&emark of the
personnel
handling
compliance
+aily stock
%ccount
&ule ,) of CE&2
/o form
prescribed 31ld
-( 4
+escription of goods
manufactured! opening
balance! 0uantity
produced or
manufactured! inventory
of goods! 0uantity
removed! assessable
value! the amount of duty
payable and particulars
regarding amount of duty
actually
Cenvat Credit 1art - para ,.: of &ecord of receipt!
@
%ccount CEM2 &ule B384 of
CC&.
31ld -( #$24
disposal! consumption
and inventory of inputs
and capital goods with
information about value!
duty paid! person from
whom purchased.
Cenvat credit
documents
&ule B 3,4 of CC& %ny of the following
documents in original to
be maintained .
a. an invoice issued by
34 a manufacturer! 34
and importer! 34 a first
stage dealer or a second
stage dealer.

1ersonal "edger
%ccount
1art - para (.(
CEM2 Form %nn.
@ CEM
EN (/!"
EN - (/!"
Each credit and debit entry in 1"% is to be made on separate lines and assigned a running serial
number for the financial year. 1"% must be prepared in triplicate. Credit in the 1"% can be made
by making cash payment into the Treasury2or %uthorised 5ank.
(uidance Note for reporting compliance'
,. For personnel reporting compliance >

1lease certify that the records are maintained as per the statutory re0uirement and entries are
passed within the statutory period.
(. For legal audit personnel .
1lease study with the help of complying authority complete system of day to day maintenance of
the records. #ighlight the important details.
Part fi&e Specific procedural compliance'
2! *en&at *redit0
Sl
/o.
+escription Comments! if any! of the
personnel handling
compliance2 Explanatory /ote
/o. 3f any4
*EN32T *redit
, CE/-%T credit 3Credit of duty paid on inputs4 is
available to the manufacturer of final product. The final
product means excisable goods manufactured or
produced from inputs. The Scheme allows CE/-%T
Credit to be taken of duties such as Excise +uty! SE+!
E
%+E! C-+ and educational cess paid on inputs and
capital goods received in a factory 3&ule 6 of CE/-%T
credit &ules! ())(.
The CE/-%T credit can be utili?ed to pay Excise duty
on any final product! inputs cleared as such or after
partially processed and capital goods removed as such.
%ll raw materials or inputs are covered except "ight
+iesel oil! #igh Speed +iesel and Motor Spirit.
Similarly! capital goods including pollution control
e0uipment! components! spares! accessories! moulds
and dies and paints! packaging material and
greases2coolants are eligible goods on which credit can
be availed
CE/-%T credit can be taken on the basis of following
documents 3&ule B4 .
,. %n invoice of the manufacturer! importer or a first
stage dealer or second stage dealer.
(. % supplementary invoice
6. 5ill of entry
-efund of *EN32T credit accumulated due to
export
&efund of CE/-%T credit accumulated due to export .
3&ule : of CC&! /otification ,,2())(4 . &efund
applicable on fulfilment of following conditions .
(. The goods are exported in accordance with the
Central Excise &ules! ())(.
6. The claims for refund submitted not more than once
in any 0uarter in a calendar year. f average export
clearances of dutiable goods in value terms is
seventy per cent or more in the preceding three
months! the claims may be on monthly basis.
8. %n application in Form % to be filed with %ssistant
Commissioner of Central Excise along with the 5ill
of "ading or Shipping 5ill.
:. The refund is allowed only where a manufacturer is
not in a position to utili?e the credit of the duty on
inputs allowed against goods exported during the
0uarter or month.
A. %part from this there is no provision for the refund
of accumulated CE/-%T credit.
4ob )or5
Hob work is allowed in accordance with the /otification
/o. (,82,E@A . The notification prescribes following
conditions and procedure'
,. Manufacturer to file an undertaking that the
goods shall be used in relation to manufacture of
a dutiable final product or a final product for
export.
,)
(. Manufacturer maintains proper records to show
that the goods sent for Gob work are used for the
manufacture of dutiable goods or export goods
etc.
6. %fter filing the undertaking manufacturer can
send raw material or semi finished raw material
for processing to the Gob worker
8. %fter receipt of the goods back from Gob worker!
the manufacturer can use the goods for the
manufacture of the final product and then clear
the same on payment of duty or for exports etc.
:. Sub &ule : of &ule 8 of CC& envisages that
manufacturer can avail CE/-%T credit even on
the inputs and capital goods that are sent to the
Gob worker provided the inputs or capital goods
are received back within a period of ,@) days
from Gob workerIs place.
A. n case goods are not received back within a
period of ,@) days! the manufacturer has to
reverse the duty but again can take credit once
goods are received back.
3aluation
The obGective of the provisions of Section 8 of the
Central Excise %ct and the -aluation &ules is to arrive
at the true and correct transaction value or if it is not
possible then to arrive at the nearest ascertainable value
thereof'
Section 8 of CE% envisages that on fulfilment of the
following conditions the transaction value of the goods
will be taken as excisable value'
a. *oods are sold by the assessee
b. For delivery at the time and place of removal!
c. The assessee and the buyer of the goods are not
related!
d. 1rice is the sole consideration for the sale.
For details about transaction value please see EN-(6!"
7arehousing
n respect of certain goods! provision has been made to
store the goods in warehouses without payment of duty.
For the details of procedure about warehousing! please
see EN (6!#"
EN (6!"
Jtransaction valueI means the price actually paid or payable for the goods! when sold! and
includes in addition to the amount charged as price! any amount that the buyer is liable to pay to!
or on behalf of! the assessee! by reason of! or in connection with the sale! whether payable at the
time of sale or at any other time! including! but not limited to! any amount charged for! or to make
,,
provision for! advertising or publicity! marketing and selling organi?ation expenses! storage!
outward handling! servicing! warranty! commission or any other matter= but does not include the
amount of duty of excise! sales tax and other taxes! if any! actually paid or actually payable on
such goods.
Following are the main inclusion in Transaction value'
B. 1acking Charges also packing supplied by the buyer to the supplier.
@. +esign and engineering charges
E. Consultancy charges relating to the manufacturing
,). Compulsory after sale service2warranty services
,,. "oading and handling charges
,(. %ny additional consideration flowing from the buyer to the seller is to be
included.
Exclusion from Transaction -alue'
,. Taxes are to be excluded from the transaction value
(. Trade discount and cash discount can be excluded
6. $utward handling! freight and insurance
EN (6!#"
Farehousing procedure to be followed .
a. Farehouse to be registered by Excise Commissioner.
b. Consignor to send goods with application KEarlier %&>6L with invoice to consignee.
c. $n arrival at destination! rewarehousing certificate will be sent duly countersigned by
&ange superintendent to his counterpart at the end of consignee.
d. f rewarehousing certificate is not received within E) days! consignor shall pay the duty.
B. 1roper accounts shall be maintained at the warehouse. #e will be responsible for payment
of duty! penalty etc.
(uidance Note for reporting compliance'
,. For personnel reporting compliance >
This part contains important details of statutory provisions. f the same is followed! please inform
the same. n case of any different observation or different practice! please intimate the same.
(. For legal audit personnel .
1lease study with the help of complying authority complete system of excise treatment in case of
different situation. #ighlight the necessary details.
Part six
8etails needed from complying authority'
,(
/ame of the Company
Factory location
Central Excise &egistration /umber
Functional #ead
Complying authorityIs name
+etails of the final products 3%s per excise registration certificate4
Sl /o. Technical name of product Chapter and #eading /o Current excise duty
rate
,
(
6
8
:
A
+etails of nputs
Sl /o. Technical name of product Chapter and #eading /o Current excise duty
rate
,
(
6
8
:
A
B
,6