The Central Government has issued a notification dated 1 March 2016 under the Central Excise Rules, 2002, granting procedural relief to certain manufacturers of jewellery. The notification addresses the practical difficulty faced by manufacturers who operate through multiple factories or premises but maintain centralised billing or accounting systems. This article explains the scope, conditions, and compliance implications thereof.
Compliance Framework under Central Excise
Under the Central Excise Rules, manufacturers of excisable goods are generally required to obtain registration for each factory or premises where manufacture takes place. This requirement applies irrespective of the size of the factory or the volume of production. In the jewellery sector, manufacturing activity is often carried out through:
- several factories or premises,
- extensive use of job workers, and
- a common office or factory where billing and accounting are centrally managed.
This operational structure results in multiple registrations and fragmented record-keeping, even where control and documentation are centralised.
Goods Covered by the Notification
The benefit under the notification is restricted to specified goods, namely:
- Articles of jewellery falling under Chapter Heading 7113 of the Central Excise Tariff
- Articles of jewellery other than plain silver jewellery
- Including silver jewellery only when studded with diamond, ruby, emerald or sapphire
Manufacturers engaged in the manufacture or production of goods outside this description are not eligible for the relief.
Centralised Registration: Exemption from Factory-wise Registration
The notification grants an exemption from the operation of the rule requiring registration of each manufacturing factory or premises. Eligible manufacturers are permitted to:
- obtain registration only for one factory, premises, or office, and
- choose the location from where centralised billing or accounting is carried out.
This single registration is sufficient for compliance purposes, provided the conditions prescribed in the notification are fulfilled.
Conditions for Availing the Facility
The option of centralised registration is subject to specific safeguards.
1. Centralised Maintenance of Records
The registered factory, premises, or office must maintain records showing:
- receipt of raw materials,
- manufacture of excisable jewellery articles, and
- receipt of finished excisable goods returned from job workers.
These records must provide a complete audit trail for excise verification.
2. Disclosure of Domestic Clearance Locations
The manufacturer opting for centralised registration must furnish details of all factories or premises (excluding job workers’ premises) from which the specified goods are removed for domestic clearance. This disclosure ensures transparency in the movement of excisable goods.
Treatment of Job Workers
The notification recognises the prevalent use of job workers in jewellery manufacturing.
While records relating to goods sent to and received from job workers must be maintained at the registered location, job workers’ premises themselves are not required to be registered or disclosed for the purpose of centralised registration under this notification.
Optional Nature of Centralised Registration
The notification makes it clear that centralised registration is not mandatory. A manufacturer of the specified goods may still choose to obtain separate registrations for each factory or premises where records are maintained, instead of opting for a single registration. The choice rests entirely with the manufacturer.
Scope and Limitations of the Notification
For clarity, the notification:
- does not exempt jewellery from excise duty,
- does not modify valuation provisions,
- does not relax record-keeping requirements, and
- does not affect assessment or audit powers.
Its scope is limited solely to registration requirements under the Central Excise Rules.
Practical Significance
The notification provides administrative flexibility to jewellery manufacturers who operate through multiple locations but maintain unified accounting and control systems. It reduces duplication of registrations while retaining regulatory oversight through centralised record maintenance and mandatory disclosures.
Key Points at a Glance
- Applicable only to specified jewellery under Chapter 7113
- Centralised registration allowed where billing or accounting is centralised
- Records must be maintained at the registered location
- Details of domestic clearance premises must be disclosed
- Job workers’ premises excluded from disclosure
- Separate registrations remain permissible
Conclusion
The notification dated 1 March 2016 introduces a targeted procedural relaxation under Central Excise for eligible jewellery manufacturers. By permitting centralised registration subject to defined conditions, it aligns registration requirements with prevailing industry practices while preserving excise control mechanisms.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 5/2016 – Central Excise (N.T.)
New Delhi, the 1st of March, 2016
G.S.R. ..(E). – In exercise of the powers conferred by sub-rule (2) of rule 9 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby exempts from the operation of said rule, every manufacturing factory or premises engaged in the manufacture or production of articles of jewellery other than articles of silver jewellery but inclusive of articles of silver jewellery studded with diamond, ruby, emerald or sapphire, falling under chapter heading 7113 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (herein after referred to as the specified goods), where the manufacturer of such goods has a centralised billing or accounting system in respect of such specified goods manufactured or produced by different factories or premises and opts for registering only the factory or premises or office, from where such centralised billing or accounting is done and where the accounts/records showing receipts of raw materials and finished excisable goods manufactured or received back from job workers are kept.
2. For availing the exemption contained herein, the manufacturer taking the centralised registration shall give details of all premises (other than those of job worker’s), from where such specified goods are removed for domestic clearance.
3. Notwithstanding anything contained in this notification, a manufacturer of specified goods may also take separate registrations for all factories or premises where the accounts/records showing receipts of raw materials and finished excisable goods manufactured or received back from job workers are kept.
[F. No. 334/8/2016 –TRU]
(Mohit Tewari)
Under Secretary to the Government of India