Central Excise

• Standard Central Excise duty rate (except in case of petroleum products)  has been increased from 10% to 12% from 17-3-2012 (i.e. midnight of 16th March 2012) [Notification No. 18/2003-CE dated 17-2-2012].
• Differential excise duty is not payable on duty paid goods lying at depot or branches.
• Merit goods were subject to 5% duty. This rate has been increased to 6%.
• Rate of 1% imposed on 130 items in 2011 Budget has been increased to 2% w.e.f. 17-3-2012 (if assessee does not avail Cenvat credit). However, in case of coal, fertilisers all goods falling under chapter 31 (except those clearly not to be used as fertilisers), articles of jewellery and mobile handsets and cellular phones (under heading 8517), the rate of duty will continue to be 1%, if assessee does not avail Cenvat credit.
• Excise duty on branded readymade garments, made-up articles and textiles will be payable @ 12% on ‘tariff value’. The tariff value will be 30% of Retail Sale Price (RSP) w.e.f. 17-3-2012 [At present, it is payable @ 10% on 45% of RSP] [Notification No. 20/2001-CE(NT) dated 30-4-2001 amended]. Thus, effective rate will be 3.6% of RSP plus education cess i.e.  total 3.708%.
• In case of readymade garments, provision for return of goods for rectification simplified [Notification No. 31/2011-CE amended]
• Excise duty introduced on unbranded gold jewellery. Duty is payable on 30% of transaction value as ‘tariff value’.  SSI exemption will be available, considering the ‘tariff value’ for calculating the limit of ` 4.50 crores [proviso to para 2(vii) of SSI exemption Notification No. 8/2003-CE(NT) dated 1-3-2003 as amended w.e.f. 17-3-2012.
• Excise duty is not payable on articles of jewellery manufactured from previous metal or old jewellery supplied by the retail customer [Notification No. 9/2012-CE(NT) dated 17-3-2012] [The wording of notification is incorrect. The notification can be interpreted to mean that in case of such jewellery, excise duty is payable on full value including value of material supplied by customer.
• There is full exemption on all unbranded articles of precious metals (which is not ‘gold jewellery’)
• Duty on branded as well as unbranded silver jewelley has been exempted.
• Return under CE (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) to be filed on quarterly basis.