Circular No. 755/71/2003-CX
13^th October, 2003

F.No. 267 /21/2003-CX-8
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Subject: - Notifications 69/2003-CE (NT) to 73/2003-CE (NT) - changes in  rule 4 of CENVAT Credit Rules, 2002- Board’s circular No. 747/63/2003-CX dated 22.09.2003- reg.

                        I am directed to refer to Notification No. 70/2003-CE (NT) dated 15.9.2003  vide which inter alia, clause (b) of sub-rule 2 of Rule 4 of CENVAT Credit Rules, 2002 was amended to substitute the words ‘refractories and refractory materials, moulds and dies’ in place of ‘ refractories and refractory materials’ . Subsequently, Board has issued a circular No.  747/63/2003-CX dated 22^nd September, 2003 in this regard. 

2.         Subsequent to issue of Circular dated 22^nd  September, 2003, it has been brought to the notice of the Board that the circular is not in consonance with the relevant provisions of sub-rule. Accordingly, the matter has been examined by Board and for para 4 of the said circular, the following para is being substituted.  

            “Certain other changes in Central Excise Rules, 2002 and CENVAT Credit Rules, 2002 have been carried out which may be gone through. Now, the Export-Oriented units shall also be required to give the details of the goods manufactured and exported under bond as well as the inputs and capital goods received without payment of duty in the monthly return filed by them. Prior to this amendment, sub-rule (2) (b) of Rule 4 of CENVAT Credit Rules, 2002  provided taking of  balance of 50% CENVAT credit in a financial year if the capital goods are in possession and use of the manufacturer of final products in such financial year subsequent to the year of acquisition.  It was represented that this condition of ‘possession and use’ could not be satisfied at times in respect of mould and dies.  The representations were considered and sub-rule (2)(b) of rule 4 of CENVAT Credit Rules, 2002  has been amended  to allow credit in respect of the balance 50% of the duty on Moulds and Dies in a subsequent financial year even if the conditions of these goods being in the possession and use of the manufacturer of final products in such subsequent years is not  fulfilled. In other words, the balance 50% credit may be taken by the manufacturer of final products for Moulds and Dies in a subsequent financial year when these goods have been used for the manufacture of final products but no longer available in such subsequent financial year.” 

3.         Trade and field formations may please be informed suitably. 

4.         Receipt of the circular may be acknowledged. 

5.         Hindi version will follow.

Vijay Mohan Jain
Under Secretary to the Govt. of India