1. Indirect Tax Certification Course -Central ExciseRajesh Kumar T.R.Bcom, LLB, FCA, DISA1

2. Revenue from different streamsof taxes2 3. Nature of taxBudgetEstimates2011-12RevisedEstimates2011-12Shortfall/ExcessCorporate tax 3,59,990 3,27,680 -32,310Income tax 1,72,026 1,71,879 -147Wealth tax 635 1,092 457Taxes of Union Territories 1,973 2,317 344Customs 1,51,700 1,53,000 1,300Union Excise Duties 1,64,116 1,50,696 -13,420Service Tax 82,000 95,000 13,000Total 9,32,440 9,01,664 -30,7763 4. CorporationtaxIncome tax Wealth taxTaxes ofUnionTerritoriesCustomsUnion ExciseDutiesService Tax400,000350,000300,000250,000200,000150,000100,00050,00002012-13 373,227 195,786 1,244 2,311 186,694 194,350 124,000Indirect Tax RevenuesINRCroreCustoms 186,694Union Excise Duties 194,350Service Tax 124,000Total indirect tax revenue 505,044Other Tax Revenues INR CroreTaxes of Union Territories/ Others 3,555Income tax 195,786Corporate tax 373,227Total direct & other duties 572,5684 5. Constitutional Aspects of Taxation5 6. Part XII Finance, Property,Contracts and SuitsArticle 265 of the Constitution ofIndia - No tax shall be levied orcollected without the authorityof law6 7. Part XI Relation Btwn Union States- 245 Parliament Make Laws Whole orany part of the Territory of India State Legislature Whole or anypart of the StateNo law made by Parliament shall bedeemed to be invalid on the groundthat it would have extra-territorialoperation 7 8. Article 246 Parliament has exclusive power tomake laws of matters covered inList I (union List) of VII Schedule State Legislature has exclusivepower to make laws of matterscovered in List II (State List)Concurrent List Both have powers8 9. Seventh ScheduleUnion List- List -I Entry 83. Duties of customs includingexport duties. Entry 84. Duties of excise on tobaccoand other goods manufactured orproduced in India except- (a) alcoholic liquors for humanconsumption; (b) opium, Indian hemp and othernarcotic drugs and narcotics,but including medicinal and toiletpreparations containing alcohol or anysubstance included in sub-paragraph(b) of this entry. Entry 92C Taxes on Services Entry 97 - Any other matter notenumerated in List II or List IIIincluding any tax not mentioned ineither of those lists.State List- List - II Entry 51. Duties of excise on thefollowing goods manufactured orproduced in the State andcountervailing duties at the same orlower rates on similar goodsmanufactured or produced elsewherein India:- (a) alcoholic liquors for humanconsumption; (b) opium, Indian hemp and othernarcotic drugs and narcotics,but not including medicinal and toiletpreparations containing alcohol orany substance included in sub-paragraph(b) of this entry. Entry 54. Taxes on the sale orpurchase of goods other thannewspapers, subject to theprovisions of entry 92A of List I.9 10. Entry 84 of Union List Duties of excise on tobacco and other goodsmanufactured or produced in India except: alcoholic liquors for human consumption; opium, Indian hemp and other drugs and narcotics, but including medicinal and toilet preparations containingalcohol or any substance including in sub-paragraph (b)of this entry (eg. Medical syrups for cold/cough)10 11. Entry 51 of state list Duties of excise on the following goodsmanufactured or produced in the State andcountervailing duties at the same or lower rateson similar goods manufactured or producedelsewhere in India:- alcoholic liquors for human consumption opium, Indian hemp and other narcotic drugs andnarcotics but not including medicinal and toilet preparationscontaining alcohol or any substance included insub-paragraph (b) of this entry11 12. Entry 97 of Union List any other matter not included in List II, III and anytax not mentioned in list II or III This is residuary powers within the hands ofUnion. Challenge of levy of any new Central tax, has topass the test of proving that it is beyond thisresiduary powers irrespective of what the tax isnamed/characterised as.12 13. Basic Elements of Taxation Levy Will define the event upon which theduty/tax gets attracted Assessment Quantification of the levy attracted Collection The mechanism by which theGovernments would collect the assessed tax13 14. Levy and collection Levy collection meaning Somaiya Organics Ltd Vs State of UP, 2001(130) ELT 3 (SC) the word collection in Art.265would mean physical realization of tax, which islevied or imposed. Levy and collect are notsynonymous terms. Levy means assessment orcharging or imposition of tax, collect meansphysical realization.14 15. Tax Art.366(28) of Const. of India Taxation includesthe imposition of any tax or impost, whethergeneral or local or special, and tax shall beconstrued accordingly.15 16. What is Direct Tax The Central Board of Revenue Act, 1963 definesdirect tax to mean any duty leviable or taxchargeable under Estate Duty Act, 1953, Wealth-taxAct, 1957, Expenditure Tax Act, 1957, Gift Tax Act,1958, Income-tax Act, 1961, Super Profits Tax Act,1963, Interest Tax Act, 1974, Hotel Receipts Tax Act,1980, and any other duty or tax which, having regardto its nature or incidence, may be declared by theCentral Government, by notification in the officialgazette to be a direct tax.16 17. Courts views Eri Beach Company Ltd Vs Attorney Generalof Ontario, AIR 1930 PC 10 direct tax is one which is demanded from the veryperson who it is intended or desired should pay it.Indirect taxes are those which are demanded fromone person in the expectation and intention thathe shall indemnify himself at the expense ofanother.17 18. Introduction to Central Excise Law18 19. Sources of CE law Central Excise Act, 1944 Rules CE Rules, 2002, Cenvat Credit Rules, 2004, CE (Appeal) Rules, 2001, CE (Advance Rulings) Rules, 2002, CE (Settlement of cases) Rules, 2007, CE (Removal of Goods at Concessional Rate of duty formanufacture of excisable goods) Rules, 2001,19 20. Sources of CE law CE Valuation (Determination of Price of ExcisableGoods) Rules, 2000, CE (Compounding of Offences) Rules, 2005, CE (Determination of Retails Sale Price of ExcisableGoods) Rules 2008 Central Excise Tariff Act, 1985 Notifications Case laws and Circulars20 21. Charging/Levy Section - 3 There shall be levied and collected in suchmanner as may be prescribed a duty of excise to be called the Central ValueAdded Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured inspecial economic zones)] which are produced or manufactured in India as,and at the rates, set forth in the First Scheduleand Second Schedule to the Central Excise TariffAct, 198521 22. Elements of Levy Production/Manufacture In India Of Goods Excisable (Set out in 1st & 2nd Sch. To CETAsubjected to duty)22 23. Sec. 3 Other Aspects Goods Manufactured in EOU and broughtto other place in India Duties of Excise to be paid Amount equal to the aggregate of the duties of customs whichwould be leviable on like goods produced ormanufactured outside India if imported intoIndia. Valuation would be based on Customs Goods Manufactured by or on behalf ofGovernment would be same like any otherMfr. Power to fix Tariff values to C.G.23 24. Manufacture Definition 2(f)Manufacture includes any process, - i) incidental or ancillary to the completionof a manufactured product; AND ii) which is specified in relation to anygoods in the Section or Chapter notes of theFirst Schedule to the Central Excise TariffAct, 1985 (5 of 1986) as amounting tomanufacture; OR24 25. Manufacture Definition 2(f) iii) which, in relation to the goods specified in the ThirdSchedule, involves packing or repacking of such goods in aunit container or labelling or re-labelling of containersincluding the declaration or alteration of retail sale price onit or adoption of any other treatment on the goods to renderthe product marketable to the consumerand the word manufacturer shall be construed accordinglyand shall include not only a person who employs hired labourin the production or manufacture of excisable goods, but alsoany person who engages in their production or manufacture onhis own account;25 26. Manufacture - analysis Definition starts with the word includes 3 limbs in the definition 2nd and 3rd limb Deemed manufacture26 27. Manufacture UOI Vs Delhi Cloth & General Mills Co.ltd, 1977 (1) ELTJ.199 (SC) manufacture implies a change, but everychange is not manufacture and yet change of an article isthe result of treatment, labour and manipulation. Butsomething is necessary and there must betransformation; a new and different article must emergehaving a distinctive name and character or use. Alsosee South Bihar Sugar Mills ltd Vs UOI, 1978 (2) ELTJ.336 (SC).27 28. Manufacture Empire Industries ltd Vs UOI, 1985 (20) ELT 1 (SC) toconstitute manufacture it is not necessary that oneshould absolutely make out a new thing because it is wellsettled that one cannot absolutely make a thing by handin the sense that nobody can create matter by hand(scientifically). It is transformation of matter intosomething else that would amount to manufacture.That something is a question of degree.28 29. Manufacture What comes out after processing is a differentcommercial commodity having its distinctcharacter, use and name and is commerciallyknown as such, is an important consideration indetermining whether there is a manufacture.29 30. Manufacture UOI Vs Parle Products, 1994 (74) ELT 492 (SC) -Whether or not something results in manufacturewould depend on the facts of the case but anynumber of processes undertaken which do notresult in a commercially different commoditycannot result in manufacture.30 31. Manufacture Ujagar Prints Vs UOI, 1988 (38) ELT 535 (SC) Prevalent and generally accepted test to ascertainwhether there was manufacture was whether the changeor the series of changes brought by application ofprocesses take the commodity to the point where,commodity can no longer be regarded as the originalcommodity but is, instead, recognised as a distinct andnew article that has emerged because of the result of theprocesses.31 32. Manufacture There might be borderline cases where eitherconclusion can be reached with equaljustification. Insistence on any sharp or intrinsicdistinction between processing and manufactureresults in an over simplification of both and tendsto blur their interdependence in cases.32 33. Manufacture - processes Manufacture involves a series of processes. A process is one of the activities undertaken formanufacture of a product from input materials.33 34. Process amounting toManufacture Conversion of jumbo rolls of photographic filmsinto small flats and rolls in the desired sizes Indian Cine Agencies Vs CIT Purification and filtration done to producthydrochloric acid and sulphuric acid marketable inthe international market CCEx Vs AlokEnterprises34 35. Processes not amounting toManufacture Process of slitting and cutting of steel sheets andpolyester films, which are used for lamination, as theresultant product was not having different character,name and use. Pickling and oiling of metals as preparatory steps doesnot amount to manufacture Circular 927/17/2010 deemed in 2012 Process of cleaning used mobil oil doesnt amount tomanufacture as no new commercial commodity comesinto existance.35 36. Manufacture vs production Dictionary meaning of produce to bring forward, tobring forth or out, to bring (to a specified condition), tobring into existence or being, to work up from rawmaterial, manufacture (material) objects. Hyderabad Asbestos Ltd Vs UOI, 1980 ELT 735 manufactured and produced were synonymous sametest should be applied. Produced used in respect of natural items.36 37. Deemed manufacture Processes which may not amount to manufacture intheir natural meaning Brought under tax ambit by the artificial definition Processes mentioned in CETA as manufacture Third schedule in CETA repacking, re-labelling,putting or altering retail sale price etc. mostlyconsumer goods.37 38. Deemed Manufacture 2(f)(ii) Processes which are specified in relation to anygoods in the Section Notes or Chapter Notes to theFirst Schedule to CETA; Mere specification of a process in the Tairff entry notsufficient; Should be specifically stated that the processamounts to manufacture.38 39. Deemed Manufacture 2(f)(ii) ExampleChapter / SectionNotes forProcesses amounting to Deemed ManufactureOres, Slag and Ash Process of converting ores into concentrateMarble, Granite,sandstone, etcProcess of cutting or sawing or sizing or polishing ofblocks or any other process of converting stone blocksinto slabs or tilesAluminium Tubes &PipeThe process of drawing or redrawingIron and Steel Process of drawing or redrawing a bar, rod, wire rod,round bar or any other similar article into bright bar.Process of galvanizationBeverage, Spiritand VinegarLabelling or relabelling of containers, or, packing orrepacking from bulk packs to retail packs, or, adoption ofany other treatment to render the product marketable tothe consumer39 40. Deemed Manufacture 2(f)(ii) ExampleChapter / SectionNotes forProcesses amounting to Deemed ManufactureMisc ediblepreparationsLabelling or re-labelling of containers or re-packingfrom bulk packs to retail packs of pan masala, yeast,sauces, extracts from tea/coffee shall amount tomanufactureMade up textilearticles; sets; wornclothing & worn textilearticles; ragsAffixing brand name, labelling or re-labelling orrepacking from bulk pack to small pack of readymadegarments (Articles of Apparel) is manufactureNatural or colouredpearl; precious orsemi precious stones;precious metals;Imitation jewellery;CoinProcess of refining dore barSound recorders andRecording of sound or other phenomena on audio or40reproducersvideo tapes shall amount to manufacture 41. Deemed manufacture 2(f)(iii) Goods specified in Third Schedule to CETA Packing or repacking in a unit container Labelling or re-labelling of containers includingthe declaration or alteration of retail sale price onthe container or Adoption of any other treatment on the goods torender the product marketable to consumer.41 42. Deemed manufacture 2(f)(iii) Air Liquide North India Pvt. Ltd. Vs CCEx. [2011]271 ELT 321 (SC) Relabeling and repacking of gas in small cylinders Helium gas rendered marketable to ultimateconsumers thereof Amounts to manufacture42 43. Manufacturer Person who carries on the activity ofmanufacture. Job worker Brand owner not manufacturer Cibatul Ltd VsUOI, 1978 (22) ELT 302 (SC) principal toprincipal basis. Should not be dummy.43 44. Goods Art.366(12) Goods include all materials,commodities and articles. Sale of Goods Act, 1930 section 2(7) Goods every kind of moveable property other thanactionable claims and money; and includes stocksand shares, growing crops, grass and thingsattached to and forming part of the land which areagreed to be severed before sale or under thecontract of sale.44 45. Goods UOI Vs Delhi Cloth Mills, 1997 (1) ELT J.199(SC), - in order to be goods, the articles must becapable of coming to the market to be bought andsold. Therefore the items must be moveable andmarketable.45 46. Goods Moveability: DCM case South Bihar Sugar Mills Vs UOI, 1978 ELTJ.336 (SC)The articles must be something, which canordinarily come or can be bought to themarket to be bought and sold. As opposedto moveable goods, immoveable propertycannot be brought to the market to be sold.46 47. Goods Section 3(36) GC Act, 1897 moveablegoods mean property of every descriptionexcept immovable property Section 3(26) GC Act, 1897 immoveableproperty shall include land, benefits to ariseout of land, and things attached to the earth orpermanently fastened to anything attached tothe earth.47 48. Goods Marketability: Capability of a product of being put into the market forsale. Union Carbide India ltd Vs UOI, 1986 (24) ELT 169 (SC) An article must be something which can ordinarily cometo the market to be bought and sold. Articles in crude orelementary form are not dutiable as they are merelyintermediary products and not goods. Aluminum cans ortorch bodies produced by extrusion process neither soldnor marketable not goods.48 49. Goods CCE Vs Ambalal Sarabhai Enterprises, 1989 (43) ELT214 (SC) Duty of excise is on the manufacture ofgoods and for an article to be goods, it must beknown in the market as such or must be capable ofbeing sold in the market as goods. Actual sale isnot necessary. Usage in captive consumption is notdeterminative of whether the article is capable ofbeing sold in the market or is known in the market asgoods.49 50. Goods Even transient items/articles can be goods,provided they are known in the market asdistinct and separate articles, having separateuses. Thus, goods with unstable charactercan be theoretically marketable if there was amarket for such transient types of articles, butone has to be take a practical view on thebasis of available evidence.50 51. Goods Bhor Industries Ltd Vs CCE, 1989 (40) ELT280 (SC) Merely because an article isspecified under the Tariff, it would not becorrect to state that it is chargeable to duty,unless it is proved that the goods aremarketable. See also Ion Exchange India LtdVs CCE, 1999 (112) ELT 746 (SC)51 52. Goods Number of purchasers not relevant. Does not confine to territorial limits of India. The fact that goods are not actually marketedis of no relevance nor is it necessary that thegoods in question should be generallyavailable in the market. APSEB case.52 53. Excisable goods Section 2 (d) of CE Act it means goodsspecified in the First and Second Schedulesto the CE Tariff Act, 1985 as being subject to aduty of excise and includes salt. Explanation Goods include any article,material or substance which is capable ofbeing bought and sold for a consideration andsuch goods shall be deemed to bemarketable. (2008 amendment)53 54. Excisable goods CETA 1st and 2nd schedule Section wise each section has chapters eachchapter heading/sub-heading. Tough mentioned in the said schedules, but withBlank at the rate column, not excisable goods54 55. Point of levy & Collection Levy is on Manufacture, Collection is postponed as set out in Rules If levy attracted on the activity, the assessmentwould be based on removal CCE Vs. Vazir Sultan Tobacco Co. Ltd. 1996 (83)ELT (SC) Wallace Flour Mills Ltd Vs CCE, 1989 (44) ELT598 (SC) & UOI Vs Nandi Printers P.Ltd, 2001(127) ELT 645 (SC).55 56. Nature of Excise duty Courts views: The Province of Madras Vs Boddu Paidanna & Sons,1978 (2) ELT J.272 (FC): Duties of excise were on manufacture orproduction of an article and although theexpression duty of excise was wide enough toinclude sales tax, in view of the power expresslygiven to another authority to levy a sales tax, thesaid expression must be given a more restrictedmeaning than it might otherwise bear.56 57. Courts views In appeal before the Privy Council inGovernor General in Council Vs Province ofMadras, 1978 (2) ELT J.280 (PC) Excisewas primarily a duty levied upon amanufacturer producer on the commoditymanufactured or produced. Tax on goods and not on sales or saleproceeds.57 58. Courts views There was no overlapping of excise duty and sales tax. R.C.Jall Parsi and Ors Vs UOI, AIR 1962 SC 1281 Excise duty is primarily a duty on production ormanufacture of goods within the country. It is an indirect duty passed on to ultimate customer. Ultimate incidence will always be on the customer. Can belevied at any convenient stage.58 59. Courts views CCE Vs Acer India Ltd, 2004 (172) ELT 289 (SC) Duty ofexcise is a tax upon goods and not sale or proceedsthereof. Taxable event is manufacture or production.59 60. Courts views UOI Vs Bombay Tyres International, 1983(14) ELT 1896 (SC):Ultimate incidence of an excise duty, a typicalindirect tax, must always be on the consumer,who pays as he consumes or expends and itcontinues to be an excise duty on homemadegoods, no matter at what stage it is collected.60 61. Removal of Goods61 62. Rule 4 - Removal RULE 4. Duty payable on removal. (1) Every person whoproduces or manufactures any excisable goods, or who storessuch goods in a warehouse, shall pay the duty leviable on suchgoods in the manner provided in rule 8 or under any other law,and no excisable goods, on which any duty is payable, shall beremoved without payment of duty from any place, where they areproduced or manufactured, or from a warehouse, unlessotherwise provided : [(1A) Notwithstanding anything contained in sub-rule (1), everyperson who gets the goods, falling under Chapter 61 or 62 or 63of the First Schedule to the Tariff Act, produced or manufacturedon his account on job work, shall pay the duty leviable on suchgoods, at such time and in such manner as is provided underthese rules, as if such goods have been manufactured by suchperson : Provided that where any person had, instead of paying duty,authorized job worker to pay the duty leviable on goodsmanufactured in his behalf under the provisions of sub-rule (1A)as it stood prior to the publication of this notification, he shall beallowed to obtain registration and comply with the provisions ofthese rules within a period of thirty days from the date ofpublication of this notification in the Official Gazette.].62 63. Rule 4 - Removal (2) Notwithstanding anything contained in sub-rule (1),where molasses are produced in a khandsari sugarfactory, the person who procures such molasses, whetherdirectly from such factory or otherwise, for use in themanufacture of any commodity, whether or not excisable,shall pay the duty leviable on such molasses, in the samemanner as if such molasses have been produced by theprocurer. [(3) * ** ] (4) Notwithstanding anything contained in sub-rule (1),Commissioner may, in exceptional circumstances havingregard to the nature of the goods and shortage of storagespace at the premises of the manufacturer where thegoods are made, permit a manufacturer to store his goodsin any other place outside such premises, without paymentof duty subject to such conditions as he may specify.63 64. Rule 5 Date for determination RULE 5. Date for determination of duty andtariff valuation. (1) The rate of duty or tariffvalue applicable to any excisable goods, otherthan khandsari molasses, shall be the rate orvalue in force on the date when such goods areremoved from a factory or a warehouse, as thecase may be. (2) The rate of duty in the case of khandsarimolasses, shall be the rate in force on the date ofreceipt of such molasses in the factory of theprocurer of such molasses. Explanation. - If any excisable goods are usedwithin the factory, the date of removal of suchgoods shall mean the date on which the goodsare issued for such use.64 65. Job Work under Central Excise65 66. Dictionary MeaningUnabridged Dictionary: Work done by JobChambers Dictionary: A task, bit of work Chambers Dictionary66 67. Under notification 214/86 - CEJob work meansi. Processing or working upon raw materials orsemi-finished goodsii. Supplied to the Job workeriii. To complete a part of whole the processiv. Resulting in manufacture or finishing of anarticle or any operationv. Essential for the process67 68. Job Work under Cenvat Credit RulesSimilar definition as discussed under notification214/86 CE dated 25.03.198668 69. Job Work under Valuation RulesJob Worker means a personi. Engaged in the manufacture or productionii. On behalf of the Principal manufactureriii. From inputs and capital goods supplied byi. Principal manufacturerii. Any person authorized by him69 70. Supreme Court on Job Work Prestige Engineering No new article should be manufactured i.e. Jobworker is a person contributing only labour andskill on the supplied materials. Job Worker should return the same article afterprocessing to the customer An activity would not be job work when job workercontributes own material with material supplied tomanufacture different goods. no new articleshould be manufactured at the hand of the jobworker and he should return the same article afterprocessing to the customer70 71. Job work V/s Manufacture A job worker can be construed as a manufacturerdepending on the process Process undertaken by Job Worker can eitheramount to manufacture or not Job worker would be construed as manufacturereven though the materials are not owned by thejob worker71 72. Hired Labour A person who hires himself out to work for andunder control of another for wages. Controlled and supervised by manufacturer whohires them. A person who has no independent entity withseparate establishment unit. However, if manufactures on own account, hecannot be said to have hired himself out.72 73. Hired Labour V/s Job Work If master servant relationship or principal agent relation exists between raw materialsupplier and job worker. Raw material supplier would be the manufacturer73 74. Valuation under Job work Excise duty in hands of job worker is not payableif materials / semi-finished goods are sent under: Notification 214/86 CE Cenvat Credit Provisions74 75. Rule 10A of Valuation Rules This provision provides that Where goods are manufactured by job worker On behalf of principal manufacturer Duty would be payable on the sale value at whichprincipal manufacturer sells the goods Sold from factory: transaction value Sold from depot: Normal transaction value Price is not sole consideration: Rule 6 of valuation rules For consumption by sister units: Rule 8 of valuation rules75 76. Valuation upto March 2007 No specific provision in valuation rules Valuation was based on material cost + jobcharges The above mechanism was confirmed bySupreme Court in Ujagar Prints V/s CCE Pharmasia ltdIf goods are under MRP- MRP lessabatement76 77. Job work under service tax Job work under sec 65(19)(v) Production orprocessing of goods for, or on behalf of, theclient. (prior to 01.07.2012) After 01.07.2012 gets covered under servicedefinition and is liable when process is notamounting to manufacture Exempted by Notification No. 25/2012-ST if : It is intermediate process as job work; and Person sending the goods would pay appropriateduty on final products.77 78. Exemptions Exemptions from payment of duty when: Job work is under Cenvat provisions Job work under notification 214/86 Job work for SSI units78 79. Job Work under Cenvat Rule 4(5)(a) allows manufacturer to sendmaterials for job work. The goods after processing can be brought backfor further processing Goods can also be dispatched directly from placeof job work subject to permission fromcommissioner These are independent of exemption providedunder notification 214/8679 80. Job Work under Cenvat Contd. Goods should be returned within 180 days afterjob work Provision applies whether or not job workundertaken amounts to manufacture Any input can be sent under the said provision80 81. Job work under notification214/86 This notification was issued to grant exemptionfrom job work amounting to manufacture Both raw material and semi-finished goods canbe sent Exemption is available even if the activity resultsin intermediate product Exemption is available subject to the declarationto be filed with the jurisdictional officer of jobworker81 82. Job work under notification214/86 Job worker would be exempt from all duties andcess subject to undertaking from principalmanufacturer No time limit has been prescribed for return ofgoods Some inputs are excluded from provisions of thenotification82 83. Job work for SSI units As they dont pay duty, goods cannot be sentunder cenvat provision SSI unit has to file a declaration to AC that goodsafter job work will be used in factory formanufacture of products exempt from duty SSI unit is also required to file another declarationto AC of job worker that goods will be used afterjob work Exemption is available only for goods covered bySSI exemption83 84. Other removals Rule 16A allows for removal of: Inputs received in factory As such or after partially processed For further processing, testing, repair, re-conditioning Fulfillment of conditions specified by Commissionerof Central Excise84 85. Removal of semi-finished goods Rule 16B The manufacturer subject to conditions ofCommissioner can remove semi-finished goods The removal should be for carrying outmanufacturing process85 86. Sp. Procedure for excisable goods Rule 16C A manufacturer with specific permission canremove excisable goods For carrying out test or any process notamounting to manufacture The provision doesnt apply to proto type sent outfor trial and development Conditions as specified in permission will have tobe followed86 87. Job Work V/s Works Contract -VAT A pure job work not liable to VAT i.e. there is notransfer of property Where there is transfer of property VAT wouldbe applicable Works contract is a contract for work i.e. itinvolves use of both material and labour The tax can be levied only on the goods involvedin the contract and not on contract If the job work transaction involves use or transferof material, job worker would be liable for VAT87 88. Questions????rajesh@hiregange.comrajeshkumartr@hotmail.com88