CHAPTER 12

Special Procedure for Specified Goods

PART I

Stainless steel pattis/pattas,
and
Aluminium Circles
1. Introduction

1.1 Under rule 15 of the Central Excise (No.2) Rules, 2001 (hereinafter referred toas the ‘said Rules’), special central excise procedures have been framed with theview to facilitate the trade in specified goods, viz. Stainless Steel Patta Patties andAluminium Circles. These procedures deal with all aspects of central excise such aspayment of duty, maintenance of records, filing of returns etc.

2. Duty payable under special procedure

2.1 By Notification No.34/2001-CE, dated 28.6.2001(effective from 1 stJuly, 2001) an assessee shall have an option to pay the duty of excise on the basis ofthe cold rolling machine installed for the manufacture of Stainless steel pattis/pattas,falling under Chapter 72, or Aluminium circles falling under Chapter 76 of the FirstSchedule to the Central Excise Tariff Act, 1985(5 of 1986) by the process of coldrolling. The rates of duty per cold rolling machine, per month are, as follows :

S.No.	Item	Rate of Duty per coldrolling machine permonth
(i) (ii)	stainless steel pattis or pattas aluminium circles produced from sheetsmanufactured on cold rolling machines (a) where the length of the roller is 30” or less (b) where the length of the roller is more than30”	Rs.1,500 Rs. 7,500 Rs. 10,000

2.2 The rate of duty is fixed subject to the condition that no credit of duty paid onany raw materials, component part or machinery or finished products used for coldrolling of Stainless steel pattis/pattas, or Aluminium circles under CENVAT Credit Rules,2001 shall be taken and further that the specified procedure is followed.

3. Application to avail special procedure

3.1 The manufacturer shall make an application in the form specified inAppendix-I to the said Notification No. 34/2001-Central Excise dated 28.6.2001to theSuperintendent of Central Excise for this purpose and the Superintendent, may grantpermission for the period in respect of which the application has been made.

3.2 The application shall be made so as to cover a period of not less than twelveconsecutive calendar months, but permission may be granted for a shorter period forreasons to be recorded in writing, by the Deputy/Assistant Commissioner of CentralExcise.

3.3 If at any time during such period the manufacturer fails to avail himself of theprocedure contained in this notification, he shall, unless otherwise ordered by theAssistant Commissioner or the Deputy Commissioner, be precluded from availinghimself of such procedure for a period of six months from the date of such failure.

3.4 If the manufacturer desires to avail himself of the procedure even after the expiryof the period for which his application was granted, he shall, before such expiry,make a fresh application to the Deputy/Assistant Commissioner of Central Excise andon his failure to do so, he shall, except as provided herein, be precluded fromavailing himself of such procedure for a period of six months from the date of suchexpiry.

3.5 An application made by a manufacturer, under erstwhile sub-rule (1) of rule96ZA of the Central Excise Rules, 1944, shall be deemed to be an application madeunder the said Notification.

4. Discharge of duty liability on payment of certain sum.

4.1 A manufacturer whose application has been granted shall pay a sum calculatedat the rate specified in the said notification, subject to the conditions therein laid down.Such payment shall be in full discharge of his liability for duty leviable on his production ofsuch cold re-rolled Stainless steel pattas/pattis, or Aluminium circles during the period forwhich the said sum has been paid. However, if there is revision is revision in the rate ofduty, the sum payable shall be recalculated on the basis of the revised rate, from thedate of revision and liability for duty leviable on the production of the said goods fromthat date shall not be discharged unless the differential duty is paid. In the case theamount of duty so recalculated is less than the sum paid, the balance shall be refundedto the manufacturer:

4.2 When a manufacturer makes an application for the first time for availing theprocedure contained in this notification, the duty liability for the month in which theapplication is granted shall be calculated pro-rata on the basis of the total number ofdays in that month and the number of days remaining in the month from the date ofsuch grant.

4.3 The sum payable under the said notification shall be calculated by application ofthe appropriate rate to the maximum number of cold rolling machines installed by or onbehalf of such manufacturer in one or more premises at any time during three calendarmonths immediately preceding the calendar month in which the application under thesaid notification is made.

4.4 The sum shall be tendered by the manufacturer along with the application.

5. Manufacturer’ s declaration and accounts

5.1 The manufacturer who has been granted the required permission shall make anapplication in the form specified in (Annexure 29) to the said notification to theSuperintendent in charge of the factory for permission to remove the Stainless steelpattis/pattas, or Aluminium circles from his premises during the ensuing month, declaringthe maximum number of cold rolling machines installed by him or on his behalf, in one ormore premises at any time during three calendar months immediately preceding thesaid calendar month in which such application is made.

5.2 If such application is not made to the Superintendent of Central Excise within thespecified time limit, the manufacturer shall, unless, otherwise directed by theDeputy/Assistant Commissioner of Central Excise, and in exceptional circumstances, beliable to pay duty on his entire production of Stainless steel pattis/pattas, or Aluminiumcircles during the month or part thereof in respect of which the application was to bemade, at the rate prescribed in the First Schedule to the Central Excise Tariff Act, 1985 (5of 1986) read with any relevant notification or notifications issued under sub-section (1)of section 5A of the Central Excise Act, 1944 (1 of 1944).

5.3 The manufacturer shall also intimate the Superintendent of Central Excise inwriting of any proposed change in the number of cold rolling machines installed byhim or on his behalf, and obtain the written approval of such officer before makingany such change.

6. Exemption from certain provisions etc.

6.1 During the period in respect of which any manufacturer has been permitted toavail himself of the procedure of the said notification, he shall be exempt from theoperation of rule 8 of the said Rules.

6.2 Except in accordance with such terms and conditions as the CentralGovernment may by notification specify in this behalf, no rebate of excise duty shall bepaid under rule 18 of the said Rules, in respect of any Stainless steel pattis/pattas, orAluminium circles exported out of India, out of the stock produced by such manufacturerduring such period.

7. Provisions regarding new factories and closed factories

7.1 In the case of a manufacturer who commences production for the first time orwho recommences production after having ceased production for a continuous periodof not less than three months, and who has been permitted by the Deputy/AssistantCommissioner of Central Excise to avail of the special procedure, the amount payableby him for the first month or part thereof, as the case may be, shall be provisionallycalculated on the basis of his declaration of the maximum number of cold rollingmachines that are or are likely to be installed by him or on his behalf during such period.

7.2 At the expiry of the period, the amount payable shall be recalculated on thebasis of the maximum number of cold rolling machines actually installed and if the initialpayment falls short of the total liability so determined, the deficiency shall be recovered from the manufacturer and where the total liability is less than the initial deposit, thebalance shall be refunded to the manufacturer.

8. Power to condone failure to apply for special procedure

8.1 Notwithstanding anything contained in the said notification, the Additional/JointCommissioner of Central Excise may, at his discretion, for reasons to be recorded inwriting, and subject to such conditions as he may deem fit, apply the provisionscontained in the said notification to a manufacturer who has failed to avail himself of thespecial procedure, or to comply with any condition laid down in this notification.

9. Provision regarding factories ceasing to work or opting for the normal procedure

9.1 Where a manufacturer who had availed himself of the special procedurecontained in the said notification ceases to work ( i.e. for more than one or two shiftsonly) or reverts to the normal procedure, the duty payable by him in the month duringwhich he has availed the procedure shall be calculated on the basis of the maximumnumber of cold rolling machines installed during the last month in the prescribed mannerand the amount already paid for the month shall be adjusted towards the duty socalculated. If on such adjustment if there is any excess payment it shall be refunded tothe manufacturer and any deficiency in duty shall be recovered from him.

10. Confiscation and penalty

10.1 If any manufacturer contravenes any provision of the said notification in respectof any excisable goods, then all such goods shall be liable to confiscation, and themanufacturer shall be liable to penalty under rule 25 of the said Rules.

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