Government has notified the Central Excise (Second Amendment) Rules, 2016 to introduce specific procedural and compliance-related changes to the Central Excise Rules, 2002.
Statutory Authority and Commencement
- Issued under section 37 of the Central Excise Act, 1944
- Notified vide Notification No. 35/2016 – Central Excise (N.T.)
- Effective from the date of publication in the Official Gazette, i.e., 26 July 2016
Amendment to Rule 8: Changes in Explanation-1
Rule 8 of the Central Excise Rules, 2002 deals with the manner of payment of duty. Under the amendment:
- Item (a) in Explanation-1 to Rule 8 has been omitted, along with the entries relating to it.
- In item (b) of the same Explanation, the words “other than (a) above” have been omitted.
Effect of the Change
The Explanation to Rule 8 has been simplified by removing references to a deleted category, thereby reducing interpretational complexity in duty payment provisions.
Amendment to Rule 12: Rationalisation of Return Filing
Rule 12 governs the filing of excise returns.
Inclusion of Sl. No. 199(II)
In the fourth proviso to sub-rule (1) of Rule 12:
- A reference to Sl. No. 199(II) has been inserted in addition to Sl. No. 199(I) of Notification No. 12/2012–Central Excise.
Substitution of Existing Proviso
The earlier condition relating to manufacturers of specified exempted goods has been substituted in full. As per the revised provision:
- An assessee who:
- avails exemption under the specified notification entries, and
- does not manufacture any excisable goods other than those specified,
is required to:
- file a quarterly return,
- in the form specified by the Board,
- covering production, removal of goods, and other relevant particulars,
- within ten days after the close of the relevant quarter.
Specific Due Date Clarification
An Explanation clarifies that, for assessees availing exemption under Sl. No. 199(I) and 199(II), the due date for filing quarterly returns for the quarters ending 31 March 2016, and 30 June 2016, shall be 10 August 2016.
Amendment to Rule 12AA: Articles of Precious Metals
Rule 12AA provides special provisions relating to certain manufacturers, particularly in the jewellery and precious metals sector.
Change in Terminology and Scope
The amendment replaces references to:
- “articles of jewellery or other articles of precious metals”
with:
- “articles of precious metals falling under heading 7114 of the First Schedule to the Tariff Act.”
This change aligns the rule directly with tariff classification.
Substitution of Rule 12AA(1): Job Work Arrangements
Sub-rule (1) of Rule 12AA has been substituted entirely. Under the revised provision:
- Any person (other than an export-oriented unit or a unit located in a special economic zone) who gets articles of precious metals under tariff heading 7114 produced or manufactured on his behalf on a job work basis:
- must obtain central excise registration,
- maintain prescribed accounts,
- pay excise duty on such goods, and
- comply with all relevant provisions of the Central Excise Rules, 2002,
as if he himself were the assessee, notwithstanding that manufacturing is carried out by job workers.
Consequential Changes in Rule 12AA Explanations
To ensure internal consistency:
- References to articles of jewellery in Explanation 1 and Explanation 4 of sub-rule (9) of Rule 12AA have been substituted with: articles of precious metals falling under heading 7114 of the First Schedule to the Tariff Act.
Practical Implications
The Central Excise (Second Amendment) Rules, 2016 primarily aim to:
- simplify duty payment explanations,
- clarify quarterly return filing obligations for specified exempted goods,
- fix clear compliance responsibility on principals in job-work arrangements involving precious metal articles, and
- ensure consistency between excise provisions and tariff headings.
Conclusion
The Central Excise (Second Amendment) Rules, 2016 introduce targeted procedural changes to the Central Excise Rules, 2002. Though limited in scope, the amendments have important compliance consequences, particularly for assessees dealing in articles of precious metals and for those filing quarterly excise returns under specified exemptions.
Source:
CBEC Notification No. 35/2016 – Central Excise (N.T.) dated 26/07/2016